EU Summit enters record 5th Day (Updated)

German Chancellor Angela Merkel (C-R) chats with French President Emmanuel Macron (C), Spanish Prime Minister Pedro Sanchez (C-L) and other dignitaries while they all wear face masks during a roundtable discussion on the fourth day of the ongoing Special European Council leaders' summit, the first face-to-face meeting between EU statespeople held since the eruption of the ongoing pandemic of the COVID-19 disease caused by the SARS-CoV-2 coronavirus, in Brussels, Belgium, 20 July 2020. The heads of state and government discussed the bloc's response to the pandemic and the new long-term budget. EPA-EFE/FRANCISCO SECO / POOL

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European Commission President Ursula Von Der Leyen said that European citizens are waiting for a strong recovery plan. The world is watching us. After 4 days of intensive negotiations, it’s time to move towards a constructive compromise at the European Council which entered into the 5th day of negotiations. 

The talks in the night revolved around a number of amendments presented by EU Council President Charles Michel in an attempt to solve the impasse.

At around 0300h the Prime Minister of Slovenia Janez Janša tweeted that most issues are closed and leaders are going into final talks.

The ‘Negotiation Box’ for the umpteenth final stretch was expected early this morning.

Reuters report that the European Union leaders appeared close to agreement on a massive stimulus plan for their coronavirus-blighted economies late on Monday after the chairman of their fractious four-day summit presented a new proposal to bridge gaps between them.

EU Council President Charles Michel said he was confident the compromises he offered the 27 leaders would clinch a deal on the 750 billion euro recovery fund that many say is critical to dispel doubts about the bloc’s very future.

“I know that the last steps are always the most difficult but … I am convinced that an agreement is possible,” he said.

The EU needs the deal on economic aid to demonstrate publicly that it can step up to a crisis and stay united. European nations have done a better job of containing the coronavirus than the United States after a devastating early few months that hit Italy and Spain particularly hard, collaborating on medical, travel and economic fronts.

The European Central Bank has pumped unparalleled money into economies to keep them going, while capitals hammer out their recovery fund.

Diplomats said the leaders appeared to have put aside the rancour that stood in the way of a compromise over hours of haggling through the weekend, and one said they were “on the home stretch”.

Despite the continued rhetorical skirmishing on Monday, diplomats from across the bloc sounded optimistic that an accord on the stimulus package and, linked to it, the EU‘s 2021-2027 common budget of around 1.1 trillion euros, were at hand. Michel proposed that within the 750 billion euro recovery fund, 390 billion should be non-repayable grants, down from 500 billion originally proposed, and the rest in repayable loans.

The Netherlands had pushed for a veto on aid for countries that backslide on economic reform, but diplomats said it was now willing to back a “stop-the-clock” mechanism by which member states could put a brake on disbursements for three months and have them reviewed. Disbursements will also be linked to governments observing the rule of law. Hungary, backed by eurosceptic ally Poland, had threatened to veto the package if funds were made conditional on upholding democracy, but diplomats said a way forward on that had now been found.

Rule of Law

The proposal to link EU funding to compliance with rule of law standards has long been among the most contentious issues in the negotiations, with Hungary and Poland opposing a strong link. The latest draft compromise has watered down Charles Michel’s earlier compromise proposal. The new version makes reference to “the values of Article 2 TEU” — the part of the treaty that deals with democracy and the rule of law — and notes that “the European Council underlines the importance of the respect of the rule of law.” Nevertheless, when it comes to the description of the new mechanism itself, mention of the rule of law has been deleted. At 7:30 p.m., Michel’s proposal included wording that said “a general regime of conditionality will be introduced to tackle manifest generalised deficiencies in the good governance of Member State authorities as regards respect for the rule of law.” Now, the wording is that “a regime of conditionality to protect the budget and NextGenerationEU will be introduced” — with possible sanctions to be adopted by a qualified majority in the Council. At the same time, another paragraph has been deleted, which invited the Commission in its annual rule of law assessment, as well as the Court of Auditors, to report on how “possible manifest generalised deficiencies in the good governance of Member States authorities as regards respect for the rule of law affect or risk affecting the sound implementation of the EU budget or the financial interests of the Union.” – POLITICO

“The point of the new rule of law text was to unclarify it enough so that [Hungary’s Viktor] Orbán could save face but make it clear enough … that they cannot hold it hostage anymore.”  Germany has agreed to advance the EU disciplinary process hanging over Hungary while Berlin holds the presidency of the Council of the European Union. “Hungary has agreed to take all necessary steps within the Article 7 procedure so that a decision can be taken in the Council,” German government spokesman Steffen Seibert said. “The German Council presidency has pledged to take this process forward as far its competencies allow.” Hungarian media had previously reported that German Chancellor Angela Merkel had promised Hungarian Prime Minister Viktor Orbán that the Article 7 procedure would be closed by the end of the year. But Seibert’s statement is notably more cautious.

Reports:

El País (Spain): Michel proposes 390,000 million in direct aid to the countries most affected by the coronavirus crisis

Le Monde (France): On the fourth day of a laborious summit, a new stimulus plan will be proposed to the 27

Le Soir (Belgium): European summit, day 4: New concessions in the Netherlands, Austria, Sweden and Denmark

Rzeczpospolita (Poland): Less in subsidies in a compromise at the EU summit

Público (Portugal): At the request of several “frugals,” Michel cuts back on subsidies and the ambition of the recovery fund

Corriere della Sera (Italy): Recovery fund: Merkel and Macron appease the “frugals,” who get the super discount

The Guardian (United Kingdom): Breakthrough imminent on pandemic recovery fund at EU summit

POLITICO / REUTERS

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