No agreement on €1.85tn recovery package, divisions remain

EU leaders will have a physical summit around mid-July in effort to find a consent

EU leaders concluded their June virtual summit with still significant divisions on the massive €1.85tn recovery package, composed of the revamped 2021-2027 MFF of €1.1tn and new €750bn Next Generation EU instrument. It was suggested by the Commission on 27 May, as a strong response to the socio-economic upshots of Covid-19 pandemic.

Mentioning about an emerging consensus on different points during the meeting, Charles Michel, President of the European Council acknowledged at a joint news conference with EC President von der Leyen and Andrej Plenković, Croatia’s PM, following the summit, that serious divisions remain.

He emphasised that it was the first occasion for discussion at the level of the leaders the proposals put on the table by the Commission. Now we shift to the next phase: negotiations, EUCO President said explaining that he will immediately start political negotiations with the Member States. He also said: “We intend to have a physical summit around mid-July” specifying that he will table the new draft negotiating box before this meeting.

The discussions has showed differences of opinion on issues such as the overall size of Next Generation EU, on the balance between grants and loans, on the allocation key, and on own new resources and rebates.

This was pointed out by EC President Ursula von der Leyen, who stressed that “we are now also six months away from the end of the current MFF – and in the midst of the deepest economic crisis provoked by COVID-19”. It is therefore essential that we lose no time in setting our economic and social recovery on a firm footing.

She opined that the first discussion was in her view very positive. Leaders unanimously agreed that the severity of this crisis justifies an ambitious common response, he outlined, noting that many leaders stressed that “we must do everything in our power to reach an agreement soon in the European Council before the summer break”. There is a real understanding that the effectiveness of the response depends on this, too.

Von der Leyen commented that there was a lot of support for the focus on the green and the digital dimension – that was very good – those being driving elements for the modernisation efforts financed by Next Generation EU. All of this is good news, she said.

Both von der Leyen and Michel praised the Croatian Presidency the good job in these crisis times. Croatia’s PM Andrej Plenković said his country had an exceptional extraordinary presidency due to the Covid-19 pandemic, which has completely altered the methodology of the functioning of the Council from the first days of March.

After the summit PM Plenković tweeted: “The principle of solidarity is key in the negotiations on financing the economic recovery and the new EU budget. The EU should stand behind its citizens. We expect a quick deal at the next EUCO, if not, then by September at the latest”.

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