CBR
search
Economy

German Chancellor Angela Merkel, right, looks over papers with French President Emmanuel Macron during a round table meeting at an EU summit in Brussels, Monday, July 20, 2020. Weary European Union leaders are expressing cautious optimism that a deal is in sight on their fourth day of wrangling over an unprecedented budget and coronavirus recovery fund. (John Thys, Pool Photo via AP)

EU agrees on US$2.1 trillion deal after marathon summit

German Chancellor Angela Merkel, right, looks over papers with French President Emmanuel Macron during a round table meeting at an EU summit in Brussels, Monday, July 20, 2020. Weary European Union leaders are expressing cautious optimism that a deal is in sight on their fourth day of wrangling over an unprecedented budget and coronavirus recovery fund. (John Thys, Pool Photo via AP)

After four days and nights of wrangling, exhausted European Union leaders finally clinched a deal on an unprecedented 1.8 trillion-euro (US$2.1 trillion) budget and coronavirus recovery fund early Tuesday, after one of their longest summits ever.

German Chancellor Angela Merkel, right, looks over papers with French President Emmanuel Macron during a round table meeting at an EU summit in Brussels, Monday, July 20, 2020. (John Thys, Pool Photo via AP)

The 27 leaders grudgingly committed to a costly, massive aid package for those hit hardest by COVID-19, which has already killed 135,000 people within the bloc alone.

With masks and hygienic gel everywhere at the summit, the leaders were constantly reminded of the potent medical and economic threat the virus poses.

“Extraordinary events, and this is the pandemic that has reached us all, also require extraordinary new methods,” German Chancellor Angela Merkel said.

“There is no such thing as perfection, but we have managed to make progress.”

– French President Emmanuel Macron

To confront the biggest recession in its history, the EU will establish a 750 billion-euro coronavirus fund, partly based on common borrowing, to be sent as loans and grants to the hardest-hit countries. That is in addition to the agreement on the seven-year, 1 trillion-euro EU budget that leaders had been haggling over for months even before the pandemic.

“The consequences will be historic,” French President Emmanuel Macron said. “We have created a possibility of taking up loans together, of setting up a recovery fund in the spirit of solidarity,” a sense of sharing debt that would have been unthinkable not so long ago.

Merkel added: “We have laid the financial foundations for the EU for the next seven years and came up with a response to this arguably biggest crisis of the European Union.”

German Chancellor Angela Merkel, right, and French President Emmanuel Macron prepare to address a media conference at the end of an EU summit in Brussels, Tuesday, July 21, 2020. (John Thys, Pool Photo via AP)

Despite Macron and Merkel negotiating as the closest of partners, the traditionally powerful Franco-German alliance struggled for days to get the quarreling nations in line. But, even walking out of a negotiating session in protest together over the weekend, the two leaders bided their time and played their cards right in the end.

“When Germany and France stand together, they can’t do everything. But if they don’t stand together, nothing is possible,” said Macron, challenging anyone in the world who criticised the days of infighting to think of a comparable joint endeavour.

“There are 27 of us around the table and we managed to come up with a joint budget. What other political area in the world is capable of that? None other,” Macron said.

German Chancellor Angela Merkel, right, speaks with French President Emmanuel Macron, center, during a round table meeting at an EU summit in Brussels, Monday, July 20, 2020. (John Thys, Pool Photo via AP)

At first, Merkel and Macron wanted the grants to total 500 billion euros, but the so-called “frugals” — five wealthy northern nations led by the Netherlands — wanted a cut in such spending and strict economic reform conditions imposed. The figure was brought down to 390 billion euros, while the five nations also got guarantees on reforms.

“There is no such thing as perfection, but we have managed to make progress,” Macron said.

Even if Tuesday’s agreement was a giant leap forward, the European Parliament, which has called the moves of the member states too timid considering the challenge, still has to approve the deal.

–AP