The marathon talks, which entered their fifth day, saw leaders exchanging verbal slurs, banging their fists on the table and storming out of the negotiating rooms as spirits rose. But shortly after 5:30 a.m. in Brussels, European Council President Charles Michel said an agreement had been reached on a stimulus fund for regions and industries in the bloc affected by the pandemic. The unprecedented package brings the EU closer to full federalism by sanctioning the European Commission to borrow en masse to pay for the bailout.
But the victory came at a significant cost to the bloc, with relations between its 27 member states at an all-time low.
The € 750 billion recovery fund has been radically overhauled during more than 77 hours of bitter bickering between prime ministers, presidents and their closest aides.
At the center of the package, leaders agreed to a program of 390 billion euros of non-repayable grants to economically revive the member states most affected – a sum far less than that initially proposed by Germany and France.
Leaders also approved the EU’s next seven-year budget, which will be worth € 1,074 trillion.
German Chancellor Angela Merkel and Mr Michel became the driving force behind the deal, breaking down significant opposition that had formed since negotiations began on Friday.
Ms Merkel called it “a very important message to the rest of Europe, adding:” This very special construction of 27 European Union member states is capable of acting together and has proven to be capable of ‘Act together. “
The leaders struggled to overcome opposition from the so-called ‘Four Frugals’ – Austria, Denmark, Sweden and the Netherlands – who were reluctant to allow Brussels to borrow in international markets for fund donations to member states.
Even after a deal was struck, Dutch Prime Minister Mark Rutte refused to call the deal historic.
He added, “It’s a term I wouldn’t use. ”
The support of economists was secured by a dramatic increase in budget rebates received following the victory of Margret Thatcher in 1984 to secure a reimbursement system for Britain.
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Hungary retaliated with Prime Minister Viktor Orban threatening to veto the entire stimulus fund.
Ms Merkel and Latvian Prime Minister Krisjanis Karins devised a plan that would allow a weighted majority of member states to block cash payments to a country due to rule of law violations.
The Commission would also be tasked with presenting a proposal to protect the EU budget and more effectively recover funds from fraud.
The summit came within half an hour of breaking the bloc’s record in Nice 20 years ago, when leaders debated EU enlargement.