EU leaders thrash out deal on Coronavirus recovery fund and budget as Parliament awaits final say

After one of the longest summits on record, the heads of state finally reached agreement on Tuesday morning, but the final hurdle remains, with the consent of the European Parliament still pending.
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By Lorna Hutchinson

21 Jul 2020

The first face-to-face EU summit since the outbreak of the COVID-19 pandemic in Europe finally saw Member States seal a deal on the long-term EU budget 2021-2027 and the Next Generation EU Coronavirus recovery package.

Over ninety hours of intense wrangling came to an end in the early hours of Tuesday morning, with European Council President Charles Michel announcing on Twitter, “Deal!” French President Emmanuel Macron - one of the main proponents of the recovery fund alongside Angela Merkel - tweeted shortly thereafter, “historic day for Europe!”

Of the total €1.82tr financial package agreed at the summit, €750bn is earmarked for the Next Generation EU Coronavirus recovery plan, which is made up of €390bn in grants and €360bn in loans. The remaining €1.074tr comprises the Multiannual Financial Framework (MFF), the EU’s long-term budget for 2021-2027.

In a press conference shortly after the agreement, Michel said, “We did it! We have reached a deal on the recovery package and the European budget. A marathon which ended in success for all 27 Member States, but especially for the people. This is a good deal, this is a strong deal, this is the right deal for Europe right now.”

European Commission President Ursula von der Leyen said, “Today we’ve taken a historic step we all can be proud of. But other important steps remain. First and most important: to gain the support of the European Parliament. Nobody should take our European Union for granted. It is our common responsibility to deliver.”

The European Parliament will hold an extraordinary plenary session on Thursday from 9.30am for an initial assessment of the conclusions of the European Council.

“This is in no way a ‘final deal’ for the EU budget. Now the negotiations with the European Parliament start. Some people really seem to be forgetting that” Terry Reintke MEP

Ahead of the plenary, Parliament President David Sassoli and the political group leaders will meet on Wednesday morning.

Sassoli, reacting to the deal announcement on Tuesday, said, “This is an unprecedented agreement between governments to revive the European economy. We must now work to improve these instruments; we won't give up on a more ambitious MFF and clarity on new own resources. The European Parliament will work to protect the interests of EU citizens.”

There was a mixed bag of reactions from MEPs, with some praising the historic deal, some voicing their disappointment, and others warning of turbulence to come as Parliament scrutinises the agreement.

Dacian Cioloş, President of the Renew Europe Group, called the agreement “a historic, positive & innovative step forward for the EU,” but added, “I agree with Chancellor Merkel, that tough negotiations with the European Parliament will now start! We will seek changes on MFF, rule of law and own resources.”

S&D Group President Iratxe García Pérez also agreed that the deal was “a historic moment for Europe.”

“Compromises have been made as in any negotiation, but the lack of an agreement would have been unforgivable. The way is now open to build a more modern, green and fair EU. The Parliament will work to make the necessary improvements.”

“There is good and bad news. Good for the total volume of the MFF and recovery package, bad for the conditionalities. Good news for the own resources. Bad news for the rule of law in the EU. And now the final word will be for the European Parliament” Petra De Sutter MEP

German Greens deputy Rasmus Andresen said, “Parliament will meet for an extraordinary plenary on Thursday. The recovery deal is historic, but the cuts in the European budget and the bad compromise on the rule of law will weaken the EU. We are preparing tough negotiations, our consent can’t be taken for granted.”

Fellow German Greens MEP Terry Reintke echoed these sentiments, saying, “No, this is in no way a ‘final deal’ for the EU budget. Now the negotiations with the European Parliament start. Some people really seem to be forgetting that.”

She added, “It is obvious that if you go into negotiations with a priority to keep the sum as low as possible, you will not get the stuff that really matters. On what and how the money will be spent. Rule of law, climate, research have to pay for the Frugals’ wrong priorities.”

Belgian Greens MEP Petra De Sutter lauded the fact that a deal had finally been reached, but pointed out, “There is good and bad news. Good for the total volume of the MFF and recovery package, bad for the conditionalities. Good news for the own resources. Bad news for the rule of law in the EU.”

She added, “And now the final word will be for the European Parliament.”

Belgian EPP deputy Kris Peeters pointed out that Thursday’s plenary session on the budget and recovery package will “certainly” see “the reduced budget in research, innovation and health, as well as the rule of law mechanism” being part of the debate.

“The toxic debate has sown discord and damaged trust, at a time when unity is more necessary than ever. The Council has cynically traded in rule of law conditionality for rebates. But taxpayers’ money should not be spent propping up autocrats” Sophie in t’ Veld MEP

Dutch Renew Europe MEP Sophie in t’ Veld said that although the agreement in Council on the financial package enables an adequate European response to the crisis, “the toxic debate has sown discord and damaged trust, at a time when unity is more necessary than ever.”

“The Council has cynically traded in rule of law conditionality for rebates. But taxpayers’ money should not be spent propping up autocrats. The national emergency break on recovery funding is a power grab, an unparalleled interference in national policies of other Member States. Governance of European funding for European priorities is a matter for European democracy, including the European Parliament.”

She added, “At times of a health crisis, virtually scrapping the health funds makes no sense. Lowering research funds at a time of a global battle for brains is the wrong priority.”

“The budget procedure needs a radical overhaul. We need an annual cycle, transparent and democratic majority decision making, and an efficient budget that truly reflects common European priorities, and flexible enough to adapt to new circumstances.”

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