The European Union approves extraordinary funds of 750 billion for recovery after the pandemic.
With a «We did it! Europe is strong. Europe is united! ”, The President of the European Council, Charles Michel, celebrated the achievement of this historic pact for recovery after the pandemic in an appearance at the edge of six in the morning in which he spared neither bombastic messages nor flattery to the heads of state and Government and that exuded relaxation and satisfaction. “We have shown that the magic of the European project works because when we think it is impossible there is a spring in our path thanks to respect and cooperation,” he added. The deal closed after 5.30 hours after several hours of a technical stop “for a few small details” that occurred before midnight.
Around 90 hours of endless negotiations in a summit that started on Friday, with a scheduled duration of two days and that lasted up to five with several critical phases (in which the negotiation threatened to collapse) and only one final stretch (that of the Monday) with feelings that the pulse with the frugal could be overcome. “Europe has shown that it is capable of breaking new ground in such an exceptional situation,” stressed Chancellor Angela Merkel, whose face (weariness, resignation and measure of joy) and messages served as a thermometer for the negotiations that have turned this summit “into one of the longest in history ».
The pact has been closed based on the new document (the third of this month) that Charles Michel presented on Monday afternoon. And that it continued to maintain the total dimension of 750,000 million euros, with 390,000 million as non-reimbursable aid (the starting point was half a trillion) and the remaining 360,000 million, credits. The issuance of debt from the European Commission to substantiate it (apart from other income) would begin to wipe itself off from 2026 until 31 December 2058. A search for financing in the markets (the most colossal in the history of the EU , recognized with Triple A) that is also historical and that comes as an option after months ago the north (and in this also with Germany at the head) frontally rejected the possibility of issuing Eurobonds, which began as the main demand for countries like Italy and Spain.
As regards conditionality, there will be an “emergency brake” that in practice gives a country (alone or with others) the possibility of pulling it against one of its partners. The nuance of the wording is in the “exceptionally.” Only if you consider that “there are serious deviations” in terms of meeting the different milestones that are marked with each disbursement or “the objectives that are relevant”. The request to study the ‘conflict’ would have to be addressed to the President of the European Council, who would take him to a summit. A concession to Mark Rutte, who has been representing absolute intransigence in the most difficult moments of this negotiation.
The Recovery and Resilience package – the key chapter – rises to 672,500 million euros, from 560,000 million; 312,500 in subsidies and 360,000 in credits. Regarding the multi-annual budget, on which the entire recovery plan is hung, it remains as an absolute figure of 1,074 billion euros. The one initially raised by Michel (and which already cut by 2% that of the European Commission, which advocated for 1.1 billion). So less money to be spent – a perennial demand from the north. Of course, there is an assumed ‘obligation’ to obtain its own resources and in it, one with a specific calendar, a digital rate (for the big technology companies) for the next year, bogged down for years by the differences between the partners themselves and which has been reason for conflict with the Donald Trump Administration.
And this will translate into significant cuts in some games that were proposed as keys to the presidency of the European Commission, for an Ursula von der Leyen who has remained almost cornered during this historic one. summit. Thus, one of the star funds of the great European green pact (that of Just Transition) decreased from 30,000 million to 10,000. For agricultural development the scissors leave the game starts in half (just over 5,000 million).
In addition, rich countries see ‘rebates’ or checks increased to compensate for the difference between their greater contribution to the budget and what they require from it. Denmark would tie 322 million (125 more); Germany, 3,671 (unchanged); Netherlands, 1,921 (345 increase); Austria, 565 (328 on the rise); and Sweden, 1,069 (271 more).
The other critical front of the negotiation, which has been relegated by the importance of the historic assistance package, was the conditionality of respect for the rule of law. With the most difficult thing achieved, the leaders wanted to avoid a new anxiety with the risk of vetoing the East and especially Hungary and Poland, two countries that have been accused and sent from Brussels for months for authoritarian political drifts. In the declaration, that conditionality is blurred, it is maintained, but it does not become an effective veto to be able to use community funds.
The ‘ok’ of the leaders does not end the procedure. Now it is the European Parliament that must ratify the agreement reached. Many of his demands for greater ambition would not be met in terms of the amounts finally reflected in the agreements, but it would be unlikely that he would not be able to overcome the trance. The next step will be ratification by the different national parliaments.