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EU Covid-19 bailout

Macron threatens walkout as EU leaders disagree on Covid-19 bailout

The leaders gathered briefly on Monday morning after spending the night negotiating in smaller groups
The leaders gathered briefly on Monday morning after spending the night negotiating in smaller groups POOL/AFP

Talks among the 27 European Union leaders broke up early Monday morning without a compromise on the billions of euros needed to rescue the bloc’s Covid-battered economy. French President Emmanuel Macron threatened to walk out and accused the so-called “frugal” northern states of “selfishness” for resisting all concessions.

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What should have been a two-day Brussels summit dragged into its fourth day on Monday. Talks are to set resume at 1400 GMT.

The European Union’s 27 leaders have been unable to find a common ground on a planned 750 billion euro financial rescue package for the regional bloc.

The Covid-19 pandemic has killed around 135,000 people in the EU, and plunging its economy into an estimated contraction of 8.3 percent this year.

On Sunday, President Macron firmly expressed his discontent, towards northern nations nicknamed the “frugal four” – the Netherlands, Austria, Denmark, Sweden, who on Sunday were joined by Finland to become the "frugal five".

They are resisting the amounts France and Germany proposed in grants and loans to help member states hardest hit by the Covid-related recession.

Talks in Brussels also cover the EU’s 1 trillion euro long term budget for 2021 to 2027 that leaders have been haggling over for months even before the pandemic hit.

'No deal better than a bad deal'

Macron was reported as saying that it will be up to France and Germany to fund the EU’s rescue plan, and that they are “fighting for the interest of Europe while the ‘frugals’ are being selfish by refusing all concessions”.

The five wealthy northern nations suggested a lower coronavirus recovery fund with 350 million euros of grants and the same amount again in loans. They had long opposed any grants at all.

“We are ready to take the leap from loans to subsidies. If there are reforms, they need to be strictly defined. And they need to be able to be enforced,” said Dutch Prime Minister Mark Rutte.

Macron, who was pushing for grants to stay at 400 billion euros, said he would rather walk away than make a bad deal.

The five northern countries, led by the Netherlands, want strict controls on spending, while struggling southern nations like Spain and Italy say those conditions should be kept to a minimum.

Frugals against spenders

The five nations have been pushing for labour market and pension reforms to be linked to EU handouts and a “brake” enabling EU nations to monitor and, if necessary, halt projects that are being paid for by the recovery fund.

“He can’t ask us to do specific reforms,” Italian Prime Minister Giuseppe Conte said.

Rutte proposed a link to be made between the handout of EU funds and the rule of law. A connection aimed at Poland and Hungary, countries with right-wing populist governments that many in the EU think are sliding away from democratic rule.

Hungary Prime minister, Viktor Orban took Rutte’s proposal as a direct attack.

“I don’t know what is the personal reason for the Dutch prime minister to hate me or Hungary, but he’s attacking so harshly and making very clear that because Hungary, in his opinion, does not respect the rule of law, (it) must be punished financially,” Orban said.

Meanwhile, Charles Michel, the president of the European Council, urged the 27 EU nations to finally agree on the budget and recovery fund. And not present Europe as weak, “undermined by distrust”.

“I wish that we succeed in getting a deal and that the European media can headline that the EU succeeded in a Mission Impossible," Michel said.

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