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EU leaders meet for a summit on a coronavirus recovery package at the European Council building in Brussels EU leaders meet for a summit on a coronavirus recovery package at the European Council building in Brussels  (Copyright 2020 The Associated Press. All rights reserved)

EU tensions escalate over €2 trillion Budget & Coronavirus Aid plan

European Union negotiations on an unprecedented nearly two trillion euro budget and coronavirus recovery plan entered the fourth day on Monday, with some leaders warning the summit could end without an agreement.

By Stefan J. Bos 

It's the first face-to-face meeting between leaders of the 27 European Union member states since governments began imposing lockdowns in March to halt the spread of the coronavirus. But their more personal contact did little to ease tensions over a proposed 1.85 trillion euro budget, some 2.1 trillion dollars. 

Under the plan, a massive chunk of that money, some 750 billion euros, will be allocated for post-coronavirus economic recovery efforts. The EU's executive European Commission wants that money partly based on conventional borrowing, to be sent as loans and grants to the neediest countries. 

That 750 billion euro fund comes on top of the seven-year roughly one trillion-euro EU budget that leaders have been haggling over for months.

A group of nations led by the Netherlands pushed to limit the amount of grants given to countries whose economies have been hardest hit by the pandemic. 

But struggling southern nations like Italy and Spain say conditions should be kept to a minimum. The Netherlands and others also want to impose strict conditions on how the money is spent, explained Dutch Prime Minister Mark Rutte. "

Rutte is viewed as the leader of the nations known as the Frugal Four — the Netherlands, Austria, Denmark, and Sweden. However, their opposition to the current coronavirus recovery plans also underscored frustration over the traditional Franco-German alliance struggling to get its way. 

Walking out of talks

German Chancellor Angela Merkel and French President Emmanuel Macron even walked out of heated talks late Saturday. Dutch Prime Minister Rutte told reporters that the German and French leaders in his words "ran off in a bad mood." 

And hours later, German Chancellor Angela Merkel expressed doubts that a deal will be reached during the summit. 

"There is a lot of goodwill, but there are many positions so that I will work for it," Merkel said. But, she warned: "it may also be that there are no results today." 

However, the urgency of the talks is apparent. The coronavirus pandemic has pitched the bloc into its worst recession ever. Authorities claim the virus killed around 135,000 of the European Union's citizens.

The US-based Johns Hopkins University said the total number of confirmed cases of coronavirus worldwide passed 14 million on Saturday, with over 600,000 recorded deaths.

Hungarian-Dutch tensions

Besides the coronavirus recovery efforts, tensions also emerged over Dutch calls to link EU funding to countries such as Hungary and Poland to the rule of law.  Both countries have come under pressure for allegedly reducing the independence of the judiciary, media, and other previously independent institutions as well as financial wrongdoing. 

Hungarian Prime Minister Viktor Orbán confirmed that his nation has a dispute with the Netherlands on the matter. "I don't know what is the personal reason for the Dutch prime minister to hate me or Hungary," he said. 

"But he is attacking so harshly. And making very clear that because Hungary, in his opinion, does not respect the rule of law, [it] must be punished financially," Orban added. 

However, "That's his position, which is not acceptable because there is no decision about what is the rule of law situation in Hungary," Orbán claimed. The football fan, who built expensive stadiums, said he was willing to stay for a week "as there are more important things than football," such as an agreement for Europe. 

The standoff was, however, another hurdle for leaders trying to keep the 27-nation EU united. 

Listen to the report by Stefan Bos
20 July 2020, 10:00