EU fails to strike deal at virtual economic recovery summit

Brussels, Jun 19 (efe-epa).- European Union leaders failed to reach an agreement at a virtual conference on how to deploy the coronavirus rescue fund on Friday.

Enduring disagreements among leaders over who should bear the brunt of the cost, the bloc or individual member states, means fresh negotiations will be held in July.

“The first discussion of EU leaders on the recovery plan and the next EU budget was very positive,” European Commission President Ursula von der Leyen told reporters.

“There was an emerging consensus on different points that is very positive but at the same time we don’t underestimate the difficulties,” European Commission President Charles Michel said.

And on different topics we observe that it’s necessary to continue discussions.”

The EC president added that it was crucial to reach an agreement soon with many leaders pitching for an August date to slate to the deal.

“There was a lot of focus on the green and digital transformation of the EU economy,” the German politician continued.

During the meeting European Central Bank President Christine Lagarde warned that if EU leaders failed to reach an agreement on economic stimulus it could put financial markets, which so far have been calm, at risk.

The EC President said the main sticking points among member states were defining the overall size of the stimulus plan, the balance of loans and grants, new resources, the criteria for allocating funds and budget discounts.

Leaders gathered on Friday to flesh out an economic recovery plan with France and Germany pushing for a deal to be agreed by July so the Eurochamber could give its approval and the national ratification processes can conclude this year.

But this goal has been delayed owing to a fracture within the bloc between countries who back the proposal crafted by French President Emmanuel Macron and German Chancellor Angela Merkel of a 750 billion euro rescue fund which would cushion hard struck European economies via a mixture of loans, grants and mutualized debt.

The objective of the Next Generation EU recovery package would be to raise funds in financial markets which will be repaid between 2028 and 2058.

Member states agree that a post-pandemic recovery plan is needed but there are disagreements over several details such as the amount of money spent and implementing stricter terms and conditions on the allocation of funds, a move backed by the so-called Frugal Four: Austria, Denmark, Sweden and The Netherlands.

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