EU leaders are catching up on some sleep during the day Monday, after an all-night session in Brussels ended at 05:00 with a possible budget breakthrough.
Prime Minister Sanna Marin (SDP) spent much of Sunday in a series of smaller meetings with other prime ministers, as discussions on a proposed €750 billion coronavirus recovery package turned acrimonious over the weekend.
A group of ‘Frugal Four’ countries – Sweden, Denmark, Austria and Netherlands – were joined at the Brussels summit by Finland in demanding a reduction of the overall coronavirus funding package, and a different balance towards more loans and less grants, as the 27-nation block looks at ways to rebuild after the Covid-19 pandemic.
There are concerns for the Finns and other countries that raising money for grants on the capital markets means taking on extra national debt; and there are also issues about conditionality – withholding cash from countries with poor governance and democracy track records.
Hungary’s PM Viktor Orbán accused the Dutch of using similar tactics as his country’s former communist rulers. “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” Orbán told reporters.
The Dutch are not alone on the issue of conditionality: providing tens or hundreds of millions of EU funds on the condition that recipients adhere to EU norms on press freedoms, human rights, independent judiciary and democracy has been a regular theme of the Finnish government as well.
“I’ve been very vocal on this issue. We simply cannot accept a recovery package or multi-annual financial framework without a strong rule of law mechanism” Finland’s Minister for European Affairs Tytti Tuppurainen (SDP) recently told News Now Finland.
“So if a country continuously violates our treaty-based values, there is a possibility the money is release or even withdrawn from a particular country” she said.
Sunday meetings to try and break deadlock
Marin spent much of Sunday meeting with smaller groups of other EU leaders to try and break the deadlock and find a way forward.
She met separately with Baltic leaders; the prime ministers of Italy, Spain, Greece and Portugal; the Bulgarian and Romanian PMs; and also finally the ‘Frugal Four’ in a meeting which started at 01:30 on Monday morning.
After these breakout discussions, the full European Council meeting reconvened just after 04:00 in Brussels, and it seemed as if there were some concessions being made.
European Council President Charles Michel has tabled a new proposal for €390 billion in grants which the Finns and the Frugals will have to consider. It’s not as low as they wanted, but it’s a compromise. The test will be whether southern countries like Spain and Italy will go along with the latest ideas.
By the time the session closed around 05:00, Austrian PM Sebastian Kurtz tweeted that “tough negotiations have just ended, we can be very happy with today’s result”.
After time for sleeping, the leaders will reconvene again later on Monday afternoon.