Thursday

7th Jul 2022

EU recovery agreement deal may need 'personal' summit

  • An 'in-person' summit of EU leaders might be needed to deal the deal on the EU budget and the recovery fund (Photo: European Council)

The EU Commission will on Wednesday (27 May) set out its revised long-term budget proposal and plans for economic recovery after the Covid-19 pandemic brought Europe to a near-complete standstill.

Commission president Ursula von der Leyen will present the plans to journalists and MEPs on the recovery plan, tied to the new seven-year budget kicking off next year.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

It is expected to nudge the EU towards further integration by allowing the commission - temporarily - to borrow money on the financial markets against an increased own resources in the EU budget, in order to hand out as grants and loans to member states.

The budget and the recovery plan need to be agreed by EU leaders and the EU Parliament, but elements of it, such as the increase in the own resources, need to be approved by national parliaments.

EU leaders - who have so far met via videoconference during the coronavirus lockdown - are scheduled to have their next gathering on 18 June.

Face to face?

EU diplomats and officials suggest a personal meeting of EU will be essential for an agreement on the budget and recovery, as existing deep divisions are difficult to overcome online, and budgets are agreed in last minute haggling.

It also remains a question if EU leaders can agree in one go, or a deal requires a second meeting in July.

Commission vice-president Maros Sefcovic on Tuesday called on governments to agree swiftly.

"We need rapid political agreement, to launch the new programmes there is no time to waste, we need a European Council decision in June to be ready on time with all the programmes, therefore the stakes are so high," he said after meeting with EU affairs ministers, adding "at least" half of the ministers pleaded for speedy decision.

"18 June is our desired outcome," Sefcovic said, adding he told ministers to look at this proposal with different "optics", not only with budgetary, financial aspects.

"Therefore I was pleading [in the meeting] so much for the political leadership to overcome the current crisis, and relaunch the economy," Sefcovic said.

Croatian state secretary for European affairs, Andreja Metelko-Zgombic, whose country holds the EU's rotating presidency, said member states needs to reaffirm the credibility of the EU economy.

"All member states are aware that the time for a final compromise and for providing us with appropriate tools when it comes to MFF [EU budget] and recovery fund has come," she told reporters after the meeting.

Member states are divided over the size of the recovery instruments and whether the EU would provide loans, which need to be repaid by member states, or grants, to EU countries hardest hit by the crisis.

Dutch prime minister Mark Rutte, whose country is part of the so-called 'Frugal Four' along with Austria, Sweden and Denmark, has reiterated on Tuesday that the emergency should only provide loans.

The EU commission argues, however, that an asymmetric recovery, where some countries fall behind even further to others, would hurt all member states, and therefore grants are needed as well.

Regional ratifications?

But its not only the governments which need to bridge their differences to get a deal on the EU budget and agree on the recovery mechanism.

An increase of the own resources for the EU in the budget - von der Leyen earlier suggested to around two percent of the bloc's gross national income - needs to be approved by EU countries, including national and in some cases, regional parliaments.

National ratification could take a long time, while the recovery money would be needed for European economies at the earliest, with the bloc's growth expected to contract by 7.5 percent next year.

EU leaders back trillion-euro recovery plan

EU leaders agreed on the need for a fund to support the recovery of Europe's economy from the coronavirus pandemic, but disagreed on details. The commission will come with proposals tied to the new long-term EU budget.

Macron and Merkel propose €500bn EU recovery fund

German chancellor Angela Merkel and French president Emmanuel Macron proposed on Monday a recovery fund of €500bn to support the sectors and regions in the EU most affected by the coronavirus crisis.

EU links access to recovery fund to economic advice

Most EU countries are now breach the common fiscal rules, as governments tackle the economic fallout of the coronavirus pandemic. The commission plans to link recovery funds to countries following its budgetary advice - but sanctions seem to be few.

Mix of loans and grants in Commission €750bn package

Italy and Spain, the worst-hit EU countries by the coronavirus pandemic, will get much of the new money under the European Commission's recovery plans - that mark a turning point for the bloc in moving towards joint debt.

Column

'War on Women' needs forceful response, not glib statements

Some modest headway in recognising the unrelenting tide of discrimination and violence facing women worldwide was made at last week's largely self-congratulatory and mostly irrelevant G7 talk-fest. But no one mentioned abortion, just days after the Roe vs Wade decision.

Opinion

How industry watered-down new EU supply chain rules

The Commission fell hook, line, and sinker for the arguments of big business on the corporate due diligence directive — conflating rules and regulations with so-called 'red tape' and rebranding regulations as 'burdens' on business which should be scrapped.

News in Brief

  1. Report: British PM Johnson to resign today
  2. British PM defiant amid spate of resignations
  3. France says EU fiscal discipline rules 'obsolete'
  4. Russia claims untouchable status due to nuclear arsenal
  5. Catalan MEPs lose EU court case over recognition
  6. 39 arrested in migrant-smuggling dragnet
  7. France to nationalise nuclear operator amid energy crisis
  8. Instant legal challenge after ok for 'green' gas and nuclear

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  2. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  3. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  4. Council of the EUEU: new rules on corporate sustainability reporting
  5. Nordic Council of MinistersNordic ministers for culture: Protect Ukraine’s cultural heritage!
  6. Reuters InstituteDigital News Report 2022

Latest News

  1. Is Orban holding out an olive branch to EPP?
  2. EU should freeze all EU funds to Hungary, says study
  3. Legal action looms after MEPs back 'green' nuclear and gas
  4. EU readies for 'complete Russian gas cut-off', von der Leyen says
  5. Rising prices expose lack of coherent EU response
  6. Keeping gas as 'green' in taxonomy vote only helps Russia
  7. 'War on Women' needs forceful response, not glib statements
  8. Greece defends disputed media and migration track record

Join EUobserver

Support quality EU news

Join us