EU Agrees on COVID-19 Recovery Fund After Five Days of Marathon Talks: "A Historic Day" (Comprehensive)

After the European Union (EU) summit, Ursula von der Leyen, President of the European Commission (left), and Charles Michel, President of the European Council, are greeting each other with an elbow bump following a press conference. [Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] European Union (EU) leaders agreed on June 21 (local time) to establish a 750 billion euro (approximately 1,031.5 trillion KRW) recovery fund to respond to the impact of the novel coronavirus disease (COVID-19). After a five-day marathon negotiation, the grant portion of the total recovery fund was set at 390 billion euros.

According to Bloomberg and other sources, the 27 EU member state leaders held a five-day meeting starting from the 17th and finally agreed on the establishment of the recovery fund to revive the European economy. The core issue of the discussion, the operation method of the recovery fund, was decided to allocate 390 billion euros as grants and 360 billion euros as low-interest loans.

Charles Michel, President of the European Council, posted a brief message on his Twitter at around 5:15 a.m. before the press conference, saying, "Deal!" Later at the press conference, he said, "This agreement will send a concrete signal that Europe has the power to act," and added, "I believe this agreement will be a pivotal moment in Europe's future journey."

Ursula von der Leyen, President of the European Commission, emphasized that the negotiation lasting over 90 hours "was worth it," and said, "Europe still has the courage and creativity to think big." After the long negotiations, both President von der Leyen and President Michel appeared at the press conference early in the morning with bright expressions.

The EU member state leaders who engaged in marathon negotiations during the meeting also expressed joy after reaching the agreement. Emmanuel Macron, President of France, who was reported to have expressed frustration during the meeting, called it "a historic day for Europe" after the negotiations concluded. Angela Merkel, Chancellor of Germany, who played a leading role in the agreement, said, "I feel very relieved," and added, "We have found a solution to the biggest crisis facing the EU."

French President Emmanuel Macron (left) and German Chancellor Angela Merkel walking out to the press conference room after the European Union (EU) summit [Image source=AP Yonhap News]

The key issue in this negotiation was the size of the grant portion within the recovery fund. The European Commission proposed that 500 billion euros out of the total 750 billion euro recovery fund be allocated as grants. Germany, France, Italy, Spain, and others expressed their agreement. However, Northern European countries such as the Netherlands, Austria, Sweden, and Denmark argued that the amount of grants, which do not require repayment, should not be too large and insisted that they could only accept up to 350 billion euros.

As the negotiations reached a deadlock, the summit, originally scheduled to last two days from the 17th to 18th, extended to five days until the 21st. It recorded the longest meeting time since the five-day EU summit held in Nice, France, in 2000. The EU leaders, who faced each other wearing masks for the first time in five months, continued to tug-of-war over the grant amount, and finally, the breakthrough came when Charles Michel, President of the European Council, proposed 390 billion euros in grants the day before, paving the way for the negotiation's conclusion.

Bloomberg reported that Italy, which became the epicenter of the pandemic in Europe, is expected to be the biggest beneficiary of this agreement, citing estimates from the Italian government that Italy will receive 82 billion euros in grants and 127 billion euros in loans.

Additionally, a 'rebate' clause allowing the Netherlands, Austria, Denmark, Sweden, and Germany to receive partial refunds of their EU financial contributions was also included. According to Bloomberg, these five countries are expected to receive 50 billion euros back over the next seven years. Furthermore, Bloomberg explained that the demand for the exclusion of the 'respect for democracy' condition, which was requested by Hungary and Poland as one of the fund's conditions, weakened toward the end of the discussions.

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