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HEALTH-VIRUS-EU-SUMMIT ADVANCER
Bitterly divided EU leaders to meet on virus recovery plan
BRUSSELS, April 22, 2020 (BSS/AFP) – EU leaders are set to meet via
videoconference Thursday to tackle the economic impact of the coronavirus,
but with the group bitterly divided, hard decisions — or substantial
progress — are unlikely, officials said.
The bloc faces a dire situation. On top of 110,000 deaths across the
continent, the shutdown forced by the pandemic is set to shrink the EU
economy by a record 7.1 percent this year, according to the International
Monetary Fund.
But the 27 member countries have been unable to agree on a massive fund
for longterm economic recovery when the crisis ends.
Divisions dating back to the 2009 financial crisis have split the bloc yet
again. Badly hit and heavily indebted southern states like Spain and Italy
are demanding “solidarity” — financial help — from the rich north.
Italian Prime Minister Giuseppe Conte, who has pushed for mutualised EU
debt, dubbed “coronabonds”, struck a firm line on Tuesday.
He told the Italian parliament he would accept “no compromises” and would
not sign up to a “bargain deal”.
On the other side, northern countries led by Germany and the Netherlands
are reluctant to open the chequebook for Mediterranean governments they
accuse of profligacy, and refuse even to entertain the idea of coronabonds.
In a sign of how far apart the parties are, leaders will not even issue
their usual joint statement after their videoconference on Thursday, a
diplomat told AFP.
“No one should have exaggerated expectations for this meeting,” another
diplomat said.
– Low bar –
EU Council President Charles Michel, the nominal host of the summit, set a
low bar in his invitation letter sent to leaders on Tuesday.
He urged them only to “work towards” creating a European Recovery Fund to
rebuild the bloc’s economy after the pandemic eases.
Details of how much money would be needed and how it would be raised
remain highly contentious.
The leaders are expected to ask the European Commission, the bloc’s
executive, to analyse the likely economic recovery needs and come back with a
proposal.
In Paris, officials said no agreement on the long-term recovery fund can
be expected before June or July at the earliest.
“We need a physical meeting of heads of state and government — at least
one — and for the moment that is not possible,” a French presidency source
said.
– Long-term budget –
A senior EU official confirmed no deal was likely before the summer, but
said Thursday’s meeting could see progress on adapting the bloc’s new seven-
year budget to address the virus fallout.
Building the recovery fund into the budget for 2021-2027 gives some
reassurance to northern countries by putting it into an established
framework.
But it adds further complication to an already thorny debate about the
EU’s spending priorities in the coming years.
It also raises the possibility that poor eastern European countries will
be asked to give up development money to pay for the coronavirus recovery in
wealthier nations like Spain and Italy.
A five-page “roadmap for recovery” drawn up by Michel and commission chief
Ursula von der Leyen calls for a “Marshall Plan-type investment effort”,
referring to the huge US programme to rebuild Europe after World War II.
Various figures have been bandied around for the long-term fund.
Eurogroup president Mario Centeno has suggested a range of 700 billion to
1.5 trillion euros ($760 billion to $1.6 trillion), while French Finance
Minister Bruno Le Maire mooted one trillion.
But no decision is expected on Thursday.
BSS/AFP/MRU/2020hrs