Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

WARSAW/ROME (Reuters) - A stand-off between EU leaders at a summit in Brussels on Saturday threatened to derail plans for a massive stimulus fund to breathe life into their coronavirus-hammered economies.

European Council President Charles Michel (2nd L), German Chancellor Angela Merkel (3rd R), French President Emmanuel Macron (2nd R), and European Commission President Ursula von der Leyen (R) meet on the sidelines of an EU summit on a coronavirus recovery package at the European Council building in Brussels on July 18, 2020 (Photo by Francisco Seco / POOL / AFP) (Photo by FRANCISCO SECO/POOL/AFP via Getty Images)

FRANCISCO SECO/AFP/Getty Images

“We are in an impasse now. It is more complex than what was expected,” Italian Prime Minister Giuseppe Conte said in a video on Facebook as the 27 European Union leaders neared the end of a second day of talks. “There are many issues that remain unresolved.”

The budget commissioner of the bloc’s executive reminded the leaders - who wore masks and kept their distance from each other - that COVID-19 was still among them and they needed to act.

Story continues below advertisement

“Just a solemn reminder: the Corona crisis is not over: infections on the rise in many countries,” Johannes Hahn tweeted. “High time to reach an agreement which allows us to provide the urgently needed support for our citizens+economies!”

With the pandemic dealing Europe its worst economic shock since World War Two, leaders gathered on Friday to haggle over a proposed 750 billion euro (683.7 billion pounds) recovery fund and a 2021-27 EU budget of more than 1 trillion euros.

But a group of wealthy and fiscally “frugal” northern states led by the Netherlands have blocked progress in the first face-to-face EU summit since spring lockdowns across the continent.

They favour repayable loans rather than free grants for the hard-hit indebted economies mostly on the Mediterranean rim, and they want control over how the funds are spent.

Hopes for an agreement grew earlier on Saturday when the summit’s chairman, European Council President Charles Michel, proposed revisions to the overall package that were designed to assuage the Dutch concerns.

LATEST IN SERIES OF EU CRISES

Under the new proposals, the portion of grants in the recovery fund would be reduced to 450 billion euros from 500 billion and an ‘emergency brake’ on disbursement would be added.

Story continues below advertisement

But hopes that this would be enough to get a deal faded quickly.

“The chance is very slim that an agreement will be reached tonight. Very slim,” a diplomat from an EU member state said.

The diplomat said “frugals” were pressing for deeper cuts to the fund and bigger rebates for net payers into the core EU budget, among other demands.

Other countries had their own demands in negotiations criss-crossing different regional and economic priorities, putting in doubt an unprecedented act of solidarity for the EU under which the European Commission would borrow billions of euros on capital markets on behalf of them all.

The EU is already grappling with the protracted saga of Britain’s exit from the bloc and has been bruised by past crises, from the financial meltdown of 2008 to feuds over migration.

Another economic shock could expose it to more eurosceptic, nationalist and protectionist forces, and weaken its standing against China, the United States or Russia.

Story continues below advertisement

The exact size of the EU’s long-term budget and how far to use payouts as leverage for reforms, or whether to withhold money from countries that fail to live up to democratic standards, were still unresolved on Saturday evening.

Hungary, backed by its eurosceptic, nationalist ally Poland, has threatened to veto the whole package over a new envisaged mechanism to freeze out countries flouting democratic principles.

As leaders huddled in groups to find a way forward, an EU diplomat said that Michel would come up with another revision to the package before they gathered for dinner.

(Reporting by Gabriela Baczynska and Francesca Landini; Additional reporting by Francesco Guarascio in Brussels and Andreas Sytas in Vilnius; Writing by John Chalmers; Editing by Hugh Lawson)

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors

This content appears as provided to The Globe by the originating wire service. It has not been edited by Globe staff.

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies