EU leaders make progress in €750bn coronavirus fund talks
European leaders edged close to agreeing to the terms of a €750bn coronavirus bailout fund this morning after the “frugal four” governments signalled they were willing to compromise.
Negotiations ended in the small hours of the morning after the Netherlands, Austria, Denmark and Sweden were satisfied with €390bn of the emergency fund being made available as grants, according to officials who spoke to Bloomberg.
Talks have been going on for three days and will begin again this afternoon. EU leaders are holding their first in-person meeting in five months to thrash out a deal on the institution’s budget.
The discussions have focused on a €750bn fund that would try to stimulate the European economies worst-hit by coronavirus.
The frugal four countries have held up the talks, however. They argued against grants to highly indebted countries that they say are too generous. The EU’s original plan was to disburse €500bn as grants, which need not be paid back.
Netherlands warns talks could still fail
Progress was finally made this morning when the four northern European countries said they could accept a lower amount of grants. The rest would be paid as low-interest loans under the plans.
However, Dutch Prime Minister Mark Rutte said: “We are not there yet, things can still fall apart. But it looks a bit more hopeful than at the times were I thought last night that it was over.”
Austrian Chancellor Sebastian Kurz said: “Tough negotiations have just come to an end and we can be very satisfied with today’s result. We will continue in the afternoon.”
The Eurozone has been hit hard by the coronavirus outbreak. Italy and Spain have been two of the worst-affected countries in the world.
The European Commission earlier this month predicted the Eurozone economy will shrink by a record 8.7 per cent this year. It said the European Union economy will contract by 8.3 per cent.
In a bid to stimulate the economy, Germany, France and the European Commission have proposed a huge bailout fund.
Under the proposal, the Commission would raise the funds in the bond markets on behalf of all EU states in a radical move. In total, the upcoming EU budget and recovery fund would amount to €1.8 trillion.