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EU leaders prove 鈥榩rogress鈥 possible, set $2.1 trillion budget

European Union leaders agreed on a $2.1 trillion budget, including a $857 billion coronavirus relief fund, after one of their longest summits on record. Despite "extremely tense moments," the 27 leaders "managed to make progress," French President Emmanuel Macron said.

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Stephanie Lecocq/AP
European Commission President Ursula von der Leyen (left) and European Council President Charles Michel bump elbows after a media conference in Brussels, July 21, 2020. EU leaders agreed to an aid package for those hit by the virus which has killed 135,000 in the bloc.

After four days and nights of wrangling, exhausted European Union leaders finally clinched a deal on an unprecedented $2.1 trillion budget and coronavirus recovery fund early Tuesday, after one of their longest summits ever.

The 27 leaders grudgingly committed to a costly, massive aid package for those hit hardest by COVID-19, which has already killed 135,000 people within the bloc alone.

With masks and hygienic gel everywhere at the summit, the leaders were constantly reminded of the potent medical and economic threat the virus poses.

鈥淓xtraordinary events, and this is the pandemic that has reached us all, also require extraordinary new methods,鈥 German Chancellor Angela Merkel said.

To confront the biggest recession in its history, the EU will establish a 750 billion-euro coronavirus fund, partly based on common borrowing, to be sent as loans and grants to the hardest-hit countries. That is in addition to the agreement on the seven-year, 1 trillion-euro EU budget that leaders had been haggling over for months even before the pandemic.

鈥淭he consequences will be historic,鈥 French President Emmanuel Macron said. 鈥淲e have created a possibility of taking up loans together, of setting up a recovery fund in the spirit of solidarity,鈥 a sense of sharing debt that would have been unthinkable not so long ago.

Ms. Merkel added: 鈥淲e have laid the financial foundations for the EU for the next seven years and came up with a response to this arguably biggest crisis of the European Union.鈥

Despite Mr. Macron and Ms. Merkel negotiating as the closest of partners, the traditionally powerful Franco-German alliance struggled for days to get the quarreling nations in line. But, even walking out of a negotiating session in protest together over the weekend, the two leaders bided their time and played their cards right in the end.

鈥淲hen Germany and France stand together, they can鈥檛 do everything. But if they don鈥檛 stand together, nothing is possible,鈥 said Mr. Macron, challenging anyone in the world who criticized the days of infighting to think of a comparable joint endeavor.

鈥淭here are 27 of us around the table and we managed to come up with a joint budget. What other political area in the world is capable of that? None other,鈥 Mr. Macron said.

At first, Ms. Merkel and Mr. Macron wanted the grants to total 500 billion euros, but the so-called 鈥渇rugals鈥 鈥 five wealthy northern nations led by the Netherlands 鈥 wanted a cut in such spending and strict economic reform conditions imposed. The figure was brought down to 390 billion euros, while the five nations also got guarantees on reforms.

鈥淭here is no such thing as perfection, but we have managed to make progress,鈥 Mr. Macron said.

The summit, at the urn-shaped Europa center, laid bare how nations鈥 narrow self-interests trumped the obvious common good for all to stand together and face a common adversary.

Rarely had a summit been as ill-tempered as this one, and it was the longest since a five-day summit in Nice, France, in 2000, when safeguarding national interests in institutional reforms was a stumbling block.

鈥淭here were extremely tense moments,鈥 Mr. Macron said.

Still, considering every EU leader had the right of veto on the whole package, the joint commitment to invest and spend such funds was hailed as a success.

Adriaan Schout, an EU expert and Senior Research Fellow at the Clingendael think tank in the Netherlands, said that the unusually acrimonious and drawn-out talks ultimately produced a typical Brussels deal.

鈥淭he EU hasn鈥檛 changed. This is always what it鈥檚 about 鈥 finding compromises 鈥 and the EU always finds compromises,鈥 he said. 鈥淎nd the compromise has been hard fought. There are checks and balances in it. We don鈥檛 know how they will work.鈥

The days and nights of brutal summiteering will surely have left many wounds between member states, but as history has proven, the EU has an uncanny gift to quickly produce scar tissue and move on.

鈥淲e all can take a hit,鈥 said Dutch Prime Minister Mark Rutte. 鈥淎fter all, there are presidents among us.鈥

Despite bruising confrontations with Ms. Merkel, Mr. Macron, and his Italian counterpart, Giuseppe Conte, Mr. Rutte maintained that 鈥渨e have very good, warm relations.鈥

Mr. Conte also didn鈥檛 have time to dwell on grudges. With 35,000 Italians dead from COVID-19 and facing EU estimates his economy will plunge 11.2% this year, he had to think ahead, of things big and small 鈥 from getting cash to businesses still trying to get a foothold after the lockdown to getting school desks.

In order to open in September, his country needs up to 3 million new desks, to replace old-fashioned double and triple desks so students can keep a proper distance.

鈥淲e will have a great responsibility. With 209 billion euros, we have the possibility to relaunch Italy with strength, to change the face of the country. Now we must hurry. We must use this money for investments, for structural reforms,鈥欌 Mr. Conte said.

Even if Tuesday鈥檚 agreement was a giant leap forward, the European Parliament, which has called the moves of the member states too timid considering the challenge, still has to approve the deal.

Mr. Rutte and others also wanted a link to be made between the handout of EU funds and the rule of law 鈥 a connection aimed at Poland and Hungary, countries with right-wing populist governments that many in the EU think are sliding away from democratic rule.

In its conclusion, the European Council underlined the 鈥渋mportance of the respect of the rule of law鈥 and said it will create a system of conditionality aimed at preventing member states from getting subsidies from the budget and recovery fund if they don鈥檛 abide by its principles.

But Tuesday was a moment to revel in the achievement itself. What was planned as a two-day summit scheduled to end Saturday was forced into two extra days by deep ideological differences among the 27 leaders.

The compromise deal they finally hammered out was one that Hungarian Prime Minister Viktor Orban claimed as a victory.

鈥淲e not just managed to get a good package of money, but we defended the pride of our nations and made clear that it is not acceptable that anybody, especially those who inherited ... the rule of law criticize us, the freedom fighters that did a lot against the communist regime in favor of rule of law,鈥 he said.

This story was reported by The Associated Press.聽Mike Corder in The Hague, Netherlands; Colleen Barry in Soave, Italy; and Pablo Gorondi in Budapest, Hungary, contributed.

Editor鈥檚 note: As a public service, the Monitor has removed the paywall聽for all our coronavirus coverage. It鈥檚 free.

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