The BBC reports EU Leaders Reach Recovery Deal After Marathon Summit.
EU leaders have struck a deal on a huge post-coronavirus recovery package following a fourth night of talks. The summit, which began in Brussels on Friday morning, saw more than 90 hours of talks and became the EU's longest since a 2000 meeting in the French city of Nice, which lasted for five days.
Summit chairman Charles Michel said it was a "pivotal moment" for Europe.
The self-proclaimed frugal four - Sweden, Denmark, Austria and the Netherlands - along with Finland, had opposed allowing €500bn to be offered in the form of grants to countries hardest-hit by Covid-19. The group, led by Dutch Prime Minister Mark Rutte, originally set €375bn as the limit, in addition to wanting conditions such as the right to block requests.
At one point French President Emmanuel Macron reportedly banged his fists on the table, as he told the "frugal four" he thought they were putting the European project in danger.
- The EU €750bn (£677bn; $859bn) in grants and loans to counter the economic impact of the pandemic.
- €390bn in grants to member states hardest hit by the pandemic the rest is loans that have to be paid back.
- The frugal 4 were won over by the promise of rebates on their contributions to the EU budget.
"Never before did the EU invest in the future like this," Belgian Prime Minister Sophie Wilmès tweeted.
Blackmail in Review
Yesterday , in Italy Accuses Wealthy North European States of Blackmail I offered these comments.
When it comes to the EU, I am skeptical of headlines like this: EU leaders struggle with 'mission impossible' at deadlocked recovery summit.
The Problem with Deals
The EU is known for last minute deals. In fact, there is seldom if ever a deal except at the last moment.This happens because all 27 nations have to agree to make changes of any substance.
No Surprises Either Way
I will not be surprised by a deal, but it will not be the deal Lagarde hopes for.
Instead, assuming there is a deal, it will be based on smoke, mirrors, and promises that morph into outright lies.
Deal in Perspective
- The EU collectively is nearly the same size as the US.
- The US has spent at least $2 trillion with another $2 trillion or more on deck.
- Try to imagine Nancy Pelosi or Trump bragging about $400 billion in grants to Illinois, California, and New York, paid for by the rest of the nation, with rebates to the rest of the nation for their contributions to Illinois, California, and New York.
- Every penny above €390bn is a loan.
Check, Check, Check
The frugal four will "generously" donate €390bn in grants after a fist-banging affair on the promise of rebates on their contributions to the EU budget.
How much are they really donating?
A safe guess is about half that but the way the EU plays games with leverage it could easily be about a tenth of that.
Alternatively, the rebate promise could be an outright lie.
Smoke, Mirrors, and Lies
So take your pick. What combination of smoke, mirrors, and lies is it?
Regardless, €390bn split among the hardest hit (Italy, Spain, and France) is hardly anything to crow about no matter how you parse this out.
For more how the EU operates on smoke and lies, please see my humorous report on how the EU's Climate Change Effort is Comically Exaggerated.