European Union leaders clinched a “historic” deal on a massive stimulus plan for their coronavirus-throttled economies in the early hours of Tuesday, after a fractious summit that lasted almost five days, Reuters writes.
The agreement paves the way for the European Commission, the EU’s executive, to raise billions of euros on capital markets on behalf of all 27 states, an unprecedented act of solidarity in almost seven decades of European integration.
Summit chairman Charles Michel called the accord, reached at 5.15 a.m. (0315 GMT), “a pivotal moment” for Europe.
Many had warned that a failed summit amid the coronavirus pandemic would have put the bloc’s viability in serious doubt after years of economic crisis and Britain’s recent departure.
News of the deal in Brussels saw the euro rise to a fresh four-month high of $1.1470.
“This agreement sends a concrete signal that Europe is a force for action,” a jubilant Michel told a news conference.
French President Emmanuel Macron, who spearheaded a push for the deal with German Chancellor Angela Merkel, hailed it as “truly historic”.
Leaders hope the 750 billion euro ($857.33 billion) recovery fund and its related 1.1 trillion euro 2021-2017 budget will help repair the continent’s deepest recession since World War Two after the coronavirus outbreak shut down economies.
But in an unwieldy club of 27, each with a veto power, the summit also exposed faultlines across the bloc that are likely to hinder future decision-making on money as richer northern countries resisted helping out the poorer south.
The Netherlands led a group of ‘frugal’ states with Austria, Sweden, Denmark and Finland, insisted that aid to Italy, Spain and other Mediterranean countries that took the brunt of the pandemic should be mainly in loans, not in non-repayable grants.
“There were a few clashes, but that’s all part of the game,” said Dutch Prime Minister Mark Rutte, describing a “warm” relationship with his Italian counterpart Giuseppe Conte.
But Austrian Chancellor Sebastian Kurz said the frugals’ negotiating power was here to stay, suggesting Europe’s traditional Franco-German engine will face challenges from smaller states banding together.
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