Deadlock Over EU Recovery Fund Amid Marathon Negotiations... Stalemate on Method and Scale

Meeting extended by one day but no progress... Large gaps in fund size and method
Opposition remains from 'Frugal Four'... Hungary also raises objections

European Union (EU) member state leaders are discussing the recovery fund and other matters at the conference hall in Brussels, Belgium, from the 17th to the 19th. [Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Despite marathon negotiations lasting three days, the 27 European Union (EU) member state leaders failed to narrow their differences and reached a deadlock in discussions over the economic recovery fund in response to the novel coronavirus disease (COVID-19).

According to Bloomberg and other sources on the 19th (local time), the EU leaders held their first in-person summit since the spread of COVID-19 in Brussels, Belgium, from the 17th through the 19th, negotiating a 750 billion euro (approximately 1,033 trillion KRW) recovery fund and the 2021?2027 EU long-term budget totaling 1.074 trillion euros. The summit was originally scheduled for two days from the 17th to the 18th but was extended by one day due to unresolved disagreements.

The deadlock in negotiations stemmed from the method and scale of the recovery fund proposed by the European Commission. The Commission suggested establishing a 750 billion euro recovery fund to support member states severely affected by COVID-19, proposing that 500 billion euros be provided as grants and the remainder as loans. Germany and France actively supported this, and countries heavily impacted by COVID-19, such as Italy and Spain, strongly demanded it.

However, the so-called 'Frugal Four'?the Netherlands, Austria, Sweden, and Denmark?argued that the responsibility of recipient countries should be strengthened, insisting that support should be in the form of loans rather than grants, and that conditions such as budget and labor market reforms should be prerequisites for receiving funds. Regarding the scale, these countries stated they could accept up to a maximum of 350 billion euros. In response, Italian Prime Minister Giuseppe Conte accused the Netherlands and others of "blackmailing behavior."

Additionally, Hungary opposed linking fund support to compliance with democratic standards, threatening to reject the entire recovery fund plan if such conditions were imposed. Some Eastern European countries, including Poland and Slovenia, support Hungary's stance.

This summit has raised doubts about EU solidarity. Reports emerged that German Chancellor Angela Merkel and French President Emmanuel Macron, who had held informal talks to reach an agreement with Prime Minister Mark Rutte during the negotiations, left the negotiation table in anger. The Guardian daily described the event as "an occasion that exposed distrust among some EU leaders."

This content was produced with the assistance of AI translation services.