BRUSSELS (Reuters) – European Union leaders may not reach agreement on a coronavirus stimulus plan on Sunday, German Chancellor Angela Merkel said when marathon negotiations went into the third day and severity increased at the request of rich but thrifty countries.
German Chancellor Angela Merkel made a statement when she arrived for the first face-to-face EU summit since the coronavirus outbreak (COVID-19), in Brussels, Belgium July 19, 2020. Francisco Seco / Pool via REUTERS
Germany and France, the European Union’s power makers, are looking for an agreement on a 1.8 trillion euro ($ 2.06 trillion) economic recovery package to save bloc economies facing their worst recession since the Second World War.
After two tiring days of negotiations, a group of rich nations in the richer north led by the Netherlands no longer seemed to back down from demands for package cuts, underscoring the depth of the EU’s north-south separation.
“There are many good intentions, but also many positions. I will try my best but there will be no results, “Merkel said in Brussels when he arrived for the third day of talks.
On Saturday night, he and French President Emmanuel Macron left informal talks late that day early, refusing to accept that the level of free grants for the ailing economy in the package fell below 400 billion euros.
Italian Prime Minister Giuseppe Conte had previously accused the Netherlands and its allies Austria, Sweden, Denmark and Finland as “extortion”. Stockholm proposes to cut grants to 155 billion euros.
In their first face-to-face meeting since the spring break of the corona virus in Europe, leaders wearing face masks have framed the summit as a ‘make or break’ moment for nearly 70 years of European integration.
Failure to unite amid an unprecedented economic and health crisis will raise serious questions about the continuation of the bloc, officials and experts said.
Macron said there was a desire to compromise, but that should not deter “from the legitimate ambitions we need to have,” referring to the level of money available in the planned 750 billion euro recovery fund, which will be funded by money collected on the capital market.
Dutch Prime Minister Mark Rutte, who faces parliamentary elections in March 2021, was honest about the split with France and Germany on Saturday night.
“They were walking upset,” Rutte said of Merkel and Macron. “The big difference still exists,” he said.
While the Netherlands and its allies survived, other obstacles remained, not least because Britain’s departure from the EU meant that others had to add more money to cover the gap in the bloc’s shared cash.
Hungary, supported by Poland’s euro allies, has threatened to veto the package over a proposed new mechanism, supported by the Netherlands and most other EU countries, to freeze countries that violate democratic principles.
“There is a very different position,” Czech Prime Minister Andrej Babis told reporters. “The Netherlands insists that the rule of law must be one of the conditions for providing funds.”
Additional reporting by Tom Sims in Frankfurt, Bart Meijer in Amsterdam, Jan Lopatka in Prague, Marine Strauss in Brussels, writing by Robin Emmott, edited by Alexandra Hudson