European countries fundamentally disagreed on the main issue of the allocation of funds for the recovery of the economies of the communities affected by the coronavirus, notes The Telegraph. In accordance with the proposals of the EU Council, the European Commission must take a 750 billion Euro on international markets to help Finance aid packages for the most affected regions and sectors. Along with the allocation of funds to the recovery Fund, Prime Minister Charles Michel, the current President of the European Council, has put forward a proposal on the allocation of 1,074 trillion euros for the next seven-year EU budget.
Both proposals met significant resistance from the member States who must unanimously to sign the package. During the first day of the meeting of leaders of 27 countries-EU members, which lasted from 10 to 18 hours, with short breaks for disinfection of premises in the headquarters of the European Union, as observers, are clearly evident differences between France, Germany, Spain, Italy, on the one hand, and the so-called “modest four” countries of Northern Europe. The Netherlands, Austria, Denmark and Sweden, as well as to support their head of Hungary Viktor Orban spoke against the proposals on the amount of funds needed for the rescue Fund and the EU budget for the next seven years. They argue that the proposed amount of the restoration Fund of € 750 billion “is too big, and the Fund should be based on loans rather than grants”. Earlier Budapest has threatened to veto any potential deal if the package will be introduced a mechanism of the rule of law. France and Germany advocated the allocation of 500 billion euros in grants and 250 billion euros in loans. This plan provoked an objection from the leadership of some countries of Northern Europe. The Prime Minister of the Netherlands mark Rutte said that his government should have veto power over how the money is spent. According to representatives of “modest four”, two-thirds of the money, which will come in the form of repayable grants, may be directed to other budgets in the countries situated in the South of Europe, especially in Spain and Italy. This idea was seen as an unacceptable invasion of sovereignty of the countries-EU members France, Italy, Spain and Greece.
One of the controversial topics was the so-called management structure used to ensure that funds will be spent on other needs, when they go to member States, said the British newspaper Express. Rutte invited the Commission to allocate grants only after the European capital will undertake the necessary economic reforms and propose plans to restore their economies.
Italy and Spain, which should be the main recipientmi grants, are opposed to the binding means for the salvation of the economy to political issues. Other capitals are concerned that Hungary and Poland can access the recovery Fund due to the ongoing investigation of alleged violations of the law by the authorities of these two States.
European leaders believe that even if the agreement is not in place at this summit, it must be completed by the end of the summer. Otherwise, the background of the second wave of the pandemic, which is expected in autumn, can feel the damage already weakened European economy and particularly of the medical infrastructure, the most affected by the pandemic countries-EU members.