EU European Affairs Ministers confirmed on Wednesday 15 July their differences on important elements of the post-Covid-19 Economic Recovery Plan and the next EU Multiannual Financial Framework (MFF) (see EUROPE 12527/9).
At Wednesday’s General Affairs Council, ministers expressed different views on the proposed amount of the Recovery Plan (€750 billion), the balance between loans and grants, Rule of law conditionality, and rebates.
German Minister Michael Roth indicated that the ministers agreed on the need to reach an agreement quickly. “The next weekend will be of paramount importance”, he said. The European Council on 17 and 18 July will be devoted to the Recovery Plan and the 2021-2027 MFF.
There is also reportedly a consensus, Roth said, that aid must arrive “quickly” in the countries hardest hit by the pandemic.
“But there are a number of discrepancies that will need to be ironed out over the coming hours and days”. The German minister was optimistic that an agreement could be reached on these issues this weekend at the level of EU heads of state or government.
“The rule of law mechanism will not be sacrificed”. The President of the European Council, Charles Michel, has proposed in the new ‘Negotiating Box’ that in the event of shortcomings and risks to the proper implementation of the EU budget, the Commission proposes corrective measures that would be approved by the EU Council by qualified majority.
About ten countries at this EU Council stressed the importance of conditionality in the area of the Rule of law. ‘Frugal’ countries prefer the ‘stronger’ Commission proposal (reverse qualified majority voting).
Michael Roth spoke in favour of “strengthening the Rule of law” within the framework of the MFF. “The Rule of law mechanism will not be sacrificed”, the German minister said, referring to concessions that could be made to countries (Poland, Hungary) that refuse this conditionality. He estimated that “a large majority” of EU countries support this link between the disbursement of budget funds and respect for the Rule of law.
Grants/Loans. Mr Roth confirmed the divisions between EU countries on the balance between grants and loans in the Recovery Plan. The so-called ‘frugal’ countries (Netherlands, Austria, Denmark, Sweden) and Finland consider the amount of the Recovery Plan too high and prefer loans instead of grants. “This will be one of the most difficult issues for EU leaders to decide”, Mr Roth confirmed.
Rebate. Mr Roth also noted “a certain openness” to new own resources to repay the Recovery Plan loan.
But countries are very divided on rebates. A majority of countries, including France, Italy and others, are opposed to maintaining the EUR 3 billion rebates in Mr Michel’s draft.
The Netherlands and Denmark insist that these rebates are essential to avoid an increase in their contribution to the EU budget.
Budget Commissioner Johannes Hahn said many ministers spoke of “time pressure”. “We must quickly find a lasting solution to this crisis”, he said.
The Spanish Prime Minister, Pedro Sánchez, also said on Wednesday in Sweden that all EU countries “will have to make concessions” in order to reach an agreement on the recovery plan.
Swedish Prime Minister Stefan Löfven confirmed his opposition to a Recovery Plan consisting of a large amount of direct aid to Member States and insisted that it should only provide loans. (Original version in French by Lionel Changeur)