Yahoo News EU leaders in bitter clash over Covid-19 recovery package
Hungary’s prime minister, Viktor Orbán, accused his Dutch counterpart of using the same methods as his country’s former communist leaders on Sunday, as EU leaders publicly clashed during tense and acrimonious negotiations over the terms of a proposed €1.8tn budget and recovery package for the bloc.
A third difficult day of a summit of the EU’s 27 heads of state and government – the first in person for five months – saw movement towards agreement as talks stretched deep into the night, but laid bare the deep splits between north and south, and east and west.
At a late evening dinner, the European council president, Charles Michel, who is chairing the summit, asked the leaders whether they were “capable of building European unity and trust. Or, through a tear, will we present the face of a weak Europe, undermined by mistrust?”
Dutch prime Minister Mark Rutte said on Monday EU leaders were making progress but warned discussions could still fall apart. “At times it didn’t look good last night, but I feel that on the whole we are making progress,” Rutte told reporters in Brussels. The summit will reconvene at 4pm central European time on Monday.
What are EU leaders arguing about?
At stake is a €750bn coronavirus recovery plan intended to pull the EU out of a historic recession, as well as a €1.074tn seven-year budget. One big row is how far countries should be able to access grants. France and Germany, backed by the European commission, proposed €500bn in grants (the rest in loans) targeted at countries hardest hit by coronavirus. That has been whittled down to €390bn in a compromise plan, but whether it will be accepted remains unclear.
Who wants what?
Angela Merkel and Emmanuel Macron think the unprecedented crisis requires serious financial firepower, backed by Italy and Spain, who see Covid-19 as a test case for European solidarity. A group of northern states - Austria, Denmark, the Netherlands and Sweden, styled the “frugal four” - are wary of fiscal transfers. Dutch prime minister Mark Rutte takes the most hardline position, as he also wants his government to be able to veto recovery funds if a recipient is deemed failing on economic reforms.
What about central Europe?
Adding to the complexity is an argument over tying EU funds to respect for democratic values. Hungary and Poland, currently subject to EU inquiries on the rule of law, want a veto on any attempt to remove funds from a rogue government. France, Germany and the Scandinavian countries, who fear the weakening of democratic checks and balances, say there must be a link. Now some diplomats fear the issue could become hostage to a recovery plan deal.
Jennifer Rankin in Brussels
The leaders have been in intense debates over the size of the recovery fund for countries hit hardest by the coronavirus pandemic and the EU’s seven-year budget, known as the multi-financial framework, which is due to start next year.
Related: Bitter coronavirus summit exposes trust deficit among EU leaders
There are also stark differences over the nature of the conditions attached to the emergency funding and the balance between grants and loans on offer. The money will be borrowed from the capital markets by the European commission.
Rutte has insisted he cannot be expected to take on extra national debt in order for the EU to make cash payments to member states without his parliament having a say.
In response, Orbán, the nationalist prime minister of Hungary, who was an anti-communist dissident in his youth, accused Rutte of aping Soviet methods to crush dissent by failing to properly set out the terms on which funds would be blocked.
The Netherlands is seeking reassurance that commonly issued debt will be properly spent and wants the ability to hold back disbursements where there are governance concerns.
“They would like to introduce a new mechanism that didn’t exist until now,” Orbán told reporters, of the Dutch proposal for a country to be able to stop funding to member states undermining the rule of law. “I think it is questionable whether it has a basis in the treaty at all. I am coming from an ex-communist country. When the communist regime decided to attack us, they use unclarified legal terms exactly as the same as written in the proposal of the Dutch man … Saying ‘general deficiencies’. When I was arrested by the police and I asked them what I had done which is illegal, they say general deficiencies. What the hell does it mean?”
In response, Rutte said on Monday: “We are not here because we are going to be visitors at each others birthday party later. We are here because we do business for our own country. We are all pros.”
The row over the rule of law was dwarfed, however, by a more significant dispute over the size and form of the recovery fund, with “frugal” countries of the Netherlands, Austria, Denmark and Sweden defying France and Germany in trying to reduce the level of grants.
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EU diplomats said the four northern member states, to the evident frustration of the German chancellor, Angela Merkel, and France’s president, Emmanuel Macron, were pushing to reduce the value of grants available from €500bn to €350bn while increasing the size of the rebates they currently have on their budget contributions. The whole recovery package would also be reduced to €700bn from the €750bn initially proposed by the European commission.
Luxembourg’s prime minister, Xavier Bettel, said that in seven years of attending EU meetings, “I have never seen positions as diametrically opposed as this”.
“The negotiations are difficult, perhaps one of the most difficult I have ever been involved in, yet the spirit of compromise has not yet disappeared,” tweeted Latvia’s prime minister, Krišjānis Kariņš.
With tempers running high, Macron at one point banged his fists on the table in frustration. He also claimed that the countries seeking to reduce the size of the recovery fund were acting like the former British prime minister David Cameron during previous budget negotiations, warning that such an approach would end badly and damage Europe.
During Sunday night’s dinner, several leaders made emotional interventions. The Italian prime minister Giuseppe Conte warned Rutte that hero status at home would “last a few days” but that he risked being blamed for letting Europe down.
The summit had been markedly bad-tempered from the first day on Friday, and Michel was forced to table a new set of proposals on Saturday morning in an attempt to reboot the talks.
Michel had looked to trim €50bn off the amount of grants and to give a member state the power to hold up the disbursement of funds by making a “request within three days … to bring the matter without delay, to the European council or [finance ministers] to satisfactorily address the matter”.
Epidemics of infectious diseases behave in different ways but the 1918 influenza pandemic that killed more than 50 million people is regarded as a key example of a pandemic that occurred in multiple waves, with the latter more severe than the first. It has been replicated – albeit more mildly – in subsequent flu pandemics.
How and why multiple-wave outbreaks occur, and how subsequent waves of infection can be prevented, has become a staple of epidemiological modelling studies and pandemic preparation, which have looked at everything from social behaviour and health policy to vaccination and the buildup of community immunity, also known as herd immunity.
Is there evidence of coronavirus coming back in a second wave?
This is being watched very carefully. Without a vaccine, and with no widespread immunity to the new disease, one alarm is being sounded by the experience of Singapore, which has seen a sudden resurgence in infections despite being lauded for its early handling of the outbreak.
Although Singapore instituted a strong contact tracing system for its general population, the disease re-emerged in cramped dormitory accommodation used by thousands of foreign workers with inadequate hygiene facilities and shared canteens.
Singapore’s experience, although very specific, has demonstrated the ability of the disease to come back strongly in places where people are in close proximity and its ability to exploit any weakness in public health regimes set up to counter it.
In June 2020, Beijing suffered from a new cluster of coronavirus cases which caused authorities to re-implement restrictions that China had previously been able to lift. In the UK, the city of Leicester was unable to come out of lockdown because of the development of a new spike of coronavirus cases. Clusters also emerged in Melbourne, requiring a re-imposition of lockdown conditions.
What are experts worried about?
Conventional wisdom among scientists suggests second waves of resistant infections occur after the capacity for treatment and isolation becomes exhausted. In this case the concern is that the social and political consensus supporting lockdowns is being overtaken by public frustration and the urgent need to reopen economies.
The threat declines when susceptibility of the population to the disease falls below a certain threshold or when widespread vaccination becomes available.
In general terms the ratio of susceptible and immune individuals in a population at the end of one wave determines the potential magnitude of a subsequent wave. The worry is that with a vaccine still many months away, and the real rate of infection only being guessed at, populations worldwide remain highly vulnerable to both resurgence and subsequent waves.
Macron told reporters of his concerns about attempts to reduce the size of the recovery package, insisting there would not be a deal “made at the cost of European ambition”. Merkel had warned there was no guarantee of success.
A second meeting has been pencilled in for the last week of July but there are concerns that a second wave of coronavirus infections could stand in the way.
