Merkel and Macron vs the 'Frugal Four'

German Chancellor urges EU states to overcome deep divisions and back 750-bn euro plan to tackle economic devastation wrought by the pandemic at crunch summit next week

by AFP
Merkel and Macron vs the 'Frugal Four'
Merkel talks to French President Emmanuel Macron, who backs the EU recovery plan. He met with Dutch PM Mark Rutte – a leading frugal – for a working dinner late last month and insists talks on the fund are making progress. File photo: AFP.

German Chancellor Angela Merkel on Wednesday urged EU countries to show solidarity and overcome deep divisions to approve a massive coronavirus recovery plan this summer.

The leaders of the 27 EU states meet in Brussels next week for a crunch summit aimed at agreeing a 750-billion euro ($843-billion) plan to tackle economic devastation wrought by the pandemic.

Merkel met Wednesday with European Commission president Ursula von der Leyen, and two other top EU leaders, Charles Michel and David Sassoli, to prepare for the July 17-18 meeting.

In a joint statement, they underscored "that reaching swiftly an agreement on an ambitious European recovery package is the EU's highest priority for the coming weeks.

In addition, they "stressed that it would be essential that heads of state and government reach an agreement during this European Council meeting."

Bid to rein in spending

But a group of countries, a so-called "Frugal Four", are trying to rein in spending, which is earmarked mainly for the poorer countries of southern Europe hardest hit by the Covid-19 epidemic.

"We need extraordinary solidarity – everyone is ready, especially Germany, to overcome the pandemic, to deal with its consequences", Merkel told the European Parliament in a speech to mark Germany taking over the EU's rotating presidency for six months.

Next week's summit – the first physical meeting of leaders since travel restrictions were put in place to try to stem the spread of coronavirus – is set to be a fraught affair.

Austria, Denmark, the Netherlands and Sweden insist that loans with tough conditions attached, rather than grants, should be the preferred method of rescue and are not in a rush to make a deal.

Other countries argue that the plan, drawn up by the European Commission, is a poor allocation of money, giving too much to eastern Europeans who were never on the front lines of the pandemic.

"Our common objective is to find a quick agreement as time is running out due to the economic crisis. We must not waste time. The poorest are paying the price", Merkel said, urging all sides to make compromises.

Of the proposed 750 billion euros, 500 billion euros would be redistributed in the form of grants, with rest distributed as loans.

French President Emmanuel Macron insisted talks on the fund were making progress after meeting Dutch Prime Minister Mark Rutte – one of the leading frugals – for a working dinner late last month.