EC president proposes 50bn reduction in Covid grants

Brussels, Jul 18 (efe-epa).- European Union leaders met in Brussels Saturday on the second day of a summit on the bloc’s budget and coronavirus recovery fund.

Negotiations have been tough on the proposed 750 billion euros stimulus package, which has so far been rejected by the so-called frugal four member states, Austria, the Netherlands, Sweden and Denmark.

Leaders engaged in a lengthy day of talks on Friday with discussions continuing into the night without an agreement.

European Council President Charles Michel proposed a new compromise on Saturday which would see 50 billion euros of funding changed from grants to loans.

Under his new plan, the amount of grant funding would be reduced from 500 billion to 450 billion euros.

The reduction in the total level of direct aid seeks to persuade the frugal four to approve the package as they have pushed for more loans and fewer grants.

The original proposal had the backing of the EU’s institutions and powerful countries like Germany and France but not the Netherlands, Austria, Sweden and Denmark.

These countries also want to be able to exercise greater control over how the money would be spent by recipient nations.

Michel’s adapted proposal included a mechanism allowing any country to raise concerns with the EC.

A Dutch diplomat told Efe that Michel’s new proposal was “a step in the right direction” but that there are still “many more issues” to resolve and that “whether we get there will depend on the next 24 hours”.