MOSCOW (Pakistan Point News / Sputnik - 17th July, 2020) The EU leaders will try to clinch a consensus on the bloc's long-term budget and COVID-19 recovery fund in the upcoming two days of their first physical summit since the onset of the pandemic.
To counter the economic fallout of the epidemic, the European Commission in late May suggested setting up a 750 billion Euros ($854 billion) recovery fund, which would include 500 billion euros in grants and 250 billion euros in loans for EU nations.
The so-called Frugal Four group of European countries � Austria, Denmark, the Netherlands, and Sweden � oppose debt mutualization and believe that money should be issued in the form of loans rather than grants.
The member countries also need to agree on an adjusted budget for the 2021-2027 period totaling 1.074 trillion euros. To please "frugal" countries, Council President Charles Michel pledged that Denmark, the Netherlands, Austria, Sweden as well as Germany would receive "lump sum rebates."
In an invitation letter ahead of the summit, Michel told member states: "Now is the time. A deal is essential." He also admitted the need to "preserve the balance between loans, guarantees and grants to avoid over-burdening member states with high levels of debt."
Germany, which is currently holding the EU's presidency, has been engaged in frantic diplomatic efforts to secure a consensus on the recovery fund. Chancellor Angela Merkel, however, has said that another summit may be required to agree on a deal.
