EU leaders fight to break deadlock on recovery fund. Member states haggle over size of planned €750bn recovery response after demands for big cuts from frugal countries
A new proposal for the post-coronavirus recovery package has so far failed to bridge the gap between EU leaders.
Head of state and government had reconvened to the negotiating table on Saturday morning for a second day after hitting roadblocks on Friday night.
Two hours later, they had moved to a so-called "consultation" phase whereby they meet in smaller groups, after Council President Charles Michel tabled a new proposal in a bid to break the deadlock.
What was initially seen as a good sign for negotiations to continue, has turned into another impasse.
The Italian premier Giuseppe Conte said in a Facebook live that talks were deadlocked. He added that a balance must be struck, and that the answer to the crisis must be 'prompt, solid and robust'.
A Dutch diplomatic source said initially that while there are "many more issues to solve", the proposals are "a serious step in the right direction". It still appears there are many more creases to iron over.
The 27 leaders — joined by Michel and EU Commission President Ursula von der Leyen — are trying to broker a compromise on the trillion-euro rescue package.
The Commission initially proposed a recovery fund totalling €750 billion and has backed a joint Franco-German motion that most of the money — €500 billion — be dished out as grants to the member states most economically impacted by the COVID-19 pandemic. There is also the trillion-euro EU budget, also known as the Multi-annual Financial Framework (MFF) at stake.
Talks hit the rocks over differences the conditions attached to accessing the money.
Southern member states — Italy and Spain in particular — are in favour of the current proposal but they are opposed by the so-called "Frugal Four" — Austria, Denmark, Sweden, and the Netherlands — which want the amount to be handout out as grants to be reduced and are wary of pooling debt with less solvent countries.