E.U. Reaches ‘Historic’ Post-Pandemic Recovery Deal After Lengthy Summit

E.U. leaders have reached a historic deal for a massive stimulus plan for their coronavirus-hit economies at an early morning meeting on Tuesday after a fractious summit that lasted almost five days.

Summit chairman Charles Michel tweeted “Deal” shortly after the 27 leaders finally reached an agreement at a 5.15 a.m. (0315 GMT) plenary session.

“This agreement sends a concrete signal that Europe is a force for action,” Michel said at a dawn news conference

“It is about a lot more than money. It is about workers and families, their jobs, their health, and their well-being. I believe this agreement will be seen as a pivotal moment in Europe’s journey, but it will also launch us into the future.”

French President Emmanuel Macron has called the deal “truly historic” and that he was convinced the recovery plan and budget could meet the challenge of the coronavirus pandemic.

“This was a summit whose conclusions are truly historic. We have put in place the capability to borrow collectively, to put in place a collective recovery plan, for the first time,” Macron said. “With this recovery plan, we will reach a near doubling of the European budget over the next three years.”

Officials said the deal, which came after Michel presented compromises on a €750 billion (£677.91 billion) recovery fund to calm doubts about the eurozone’s future.

Michel proposed that within the €750 billion funds, €390 billion should be non-repayable grants, down from €500 billion originally proposed, and the rest in repayable loans.

News of the deal saw the EUR rise to a fresh four-month high of $1.1470.

The E.U. was slow to coordinate its initial response to the COVID-19 pandemic and, already weakened by Britain’s departure from the zone, a united front on economic aid would demonstrate that it can step up to a crisis and stay united.

But the tortuous summit looked doubtful at times with Europe split between north and south.

“It’s breathtaking to see that we have done it. We have reached a huge milestone setting up the future of the European Union,” said European Commission President Ursula von der Leyen, after almost 100 hours of negotiations.

The summit approached the record length set at a 2000 meeting in the French city of Nice of almost five full days.

European nations have done a better job of containing the coronavirus than the United States after a devastating early few months that hit Italy and Spain particularly hard, collaborating on medical, travel, and economic fronts.

The stakes at the summit were high with EU economies in freefall as Europe faces its deepest recession since World War Two, initial relief measures like short-time work schemes running out this summer, and fears that autumn could see deep economic malaise and social discontent.

Diplomats said failure would have risked further damaging a bloc struggling with Brexit and bruised by crises from the financial meltdown to migration feuds, exposing it to more eurosceptic, nationalist and protectionist forces.

Emotions had run high at a dinner on Sunday as a group of fiscally frugal northern nations led by the Netherlands stood their ground on the level of free grants within a proposed special recovery fund of €750 billion overall.

Macron lost patience in the early hours of Monday, banging his fist on the table in frustration at “sterile blockages” by the “frugal”, two diplomats said.

Polish Prime Minister Mateusz Morawiecki also railed against the “frugal”, branding them “a group of stingy, egotistic states” that looked at things through the prism of their own interests.

Poland would be a top beneficiary of the recovery package, receiving tens of billions of euros in grants and cheap loans, along with high-debt Mediterranean-rim countries that have taken the brunt of the pandemic in Europe.

But the rhetorical skirmishing faded on Monday, and the leaders homed in on an agreement on the stimulus package and, linked to it, the EU’s 2021–2027 common budget of around €1.1 trillion.

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