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European leaders were unable to find a compromise during the first two days of negotiations on the conditions under which co-financed funds could be allocated to countries affected by coronavir, in particular Italy and Spain.
With no progress during Saturday night’s work dinner, a break was announced shortly after midnight until Sunday at 1 p.m. Lithuanian time, BNS reported diplomatic sources.
At the heart of the dispute is the Dutch demand that states be able to veto the allocation of money if recipient countries do not implement the necessary economic reforms.
So far, there is no final consensus and on what part of the 750 billion. The euro fund should consist of grants and loans.
There is also a separate EU budget of trillions of euros for 2021-2027 at the negotiating table.
The Lithuanian delegation, led by President Gitanas Nausėda, in the new budget seeks to preserve as many funds as possible from the so-called cohesion funds, which support the poorest European regions, and accelerate the growth of direct payments to farmers Lithuanians.
The priorities have remained the same for many years, but the coronavirus crisis has fundamentally changed the situation.
At the beginning of the year, Lithuanians stressed that changes to the EU budget could lead to “shock therapy” for the country’s economy, as European support for Lithuania could drop by around a quarter as the economy is close to the EU average.
However, the crisis in the economy was caused by the coronavirus crisis, and the establishment of the recovery fund will likely mean that European support for Lithuania will not only decrease since 2021, but will increase by several billion euros.
Under the formula proposed on Saturday, support from the new fund for Lithuania would be lower than that proposed by the European Commission in May, but higher than the proposal presented last week.
Subsidies can amount to around one and a half trillion euros, with fluctuations of several hundred million euros under different formulas. In addition, the possibility of requesting additional loans of around € 2 billion is foreseen.
During the Saturday negotiations, the Lithuanians already received good news: additional compensation for agriculture was offered to Lithuania and eight other countries. An additional € 125 million in rural development funds is proposed for Lithuania, which can be seen as partial compensation for lower direct payments to farmers.
The renovated project also offered between 139 and 189 million. to increase funding for the so-called Special Transit Scheme, which is used by Russian citizens traveling through Lithuania between the main part of Russia and the Königsberg region.
President G. Nausėda called it a step forward, but promised to guarantee greater cohesion support and a faster increase in direct payments to farmers.
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