The leaders of the EU member states finally reached an agreement early Tuesday morning on a plan to revive the European economy to deal with the effects of the pandemic, following fierce pressure from northern European countries. But the compromise, according at a first glance, fails to meet expectations.
The plan, amounting to 750 billion euro, an amount that will be raised by issuing – for the first time – common European debt, will be registered in the Multiannual Financial Framework of the EU (2021-2027), totaling 1,074 trillion euro.
During the press conference, Charles Michel claimed that the agreement that was concluded “concerns much more than money. It concerns workers and families, their jobs, their health and their well-being. I believe that this agreement will be considered a key moment in Europe’s journey, but also that it will launch us in the future”.
He went on to say that the agreement shows that the Member States have been able to stand side by side with faith in their common future and “sends a strong message that Europe is a force for action”.
Among other things, the agreement provides for the reduction of funds from the Development Fund to structural budget funds.
As regards the link between the provision of aid and the rule of law, which concerned Hungary and Poland, appropriate and proportionate measures will be proposed, to be approved by the Council by a qualified majority.
Almost a third of the funds are earmarked for combating climate change and, together with the next seven-year EU budget of € 1 trillion, will be the largest green incentive package in history. All spending must be consistent with the goal of the Paris Agreement to reduce greenhouse Gas Emissions, according to Charles Michel.
The Recovery Fund agreed by the Summit will not only free up vital funds for the southern European economies hardest hit by the coronavirus, but is proof that the EU can offer genuine solidarity to members in need. With more than 100,000 Europeans dead from the coronavirus and its economy in need of reconstruction, investors were looking for unity among the 27 to react positively.
“This agreement sends a concrete message that Europe is a force for action”, Charles Michel, chairman of the EU Council of Leaders, told a news conference. “I believe that this agreement will be considered a turning point in Europe’s journey.”
Italy, the initial European focus of the pandemic, is likely to be the biggest beneficiary of the project and expects to receive about 82 billion euro in grants and about 127 billion euro in loans, according to initial estimates, a senior Italian official said. The provisions on the link between crisis funding and respect for the democratic values demanded by the Nordic countries have been removed in order to reach an agreement.
As for the attitude of the Franco-German axis, Angela Merkel’s inability to tame the rich North became apparent, while Emmanuel Macron was not up to the circumstances, who spoke of a “historic day for Europe”.
No comments from Ursula Von der Leyen, who previously wrote on Twitter that we must “move towards a constructive compromise”, because European citizens expect a strong recovery plan. People are watching us”./ibna