EU leaders to hold summit on 17-18 July on virus recovery package

European Council President, Charles Michel, and European Commission President, Ursula von der Leyen, during the press conference following the. EU-China summit on 22 June.

The leaders of the 27 EU member states will meet in Brussels on July 17, their first physical summit since the coronavirus lockdown began, to discuss an economic recovery package and the EU’s next seven-year budget.

The two-day meeting — which will unusually run into a Saturday — was confirmed by a spokesman for European Council president and summit host Charles Michel, while capitals wrangle over the terms of the huge rescue plan.

The leaders will devote the talks to the 750-billion-euro ($842-billion) recovery roadmap put forward by EU Commission president Ursula von der Leyen.

The proposed package consists of 500 billion euros in grants — a suggestion of France and Germany — and 250 billion euros in loans, to help businesses recover from an unprecedented crunch.

The proposal would be based on EU borrowing over four years and requires unanimous approval from the EU 27.

A group of countries, a so-called “Frugal Four”, are trying to rein in spending, which is earmarked mainly for the poorer countries of southern Europe hardest hit by the COVID-19 epidemic.

The Brief – Ceci n'est pas une troïka

The Commission is going to great lengths to stress that the proposed recovery fund will not be a bailout programme. “This is not an adjustment program with a different name,” the Commissioner for Economy, Paolo Gentiloni, said in May. We are not back to troïka times.

The Netherlands, Austria, Denmark and Sweden, the so-called ‘Frugal Four’, insist that loans with tough conditions attached, rather than grants, should be the prefered method of rescue and are not in a rush to make a deal.

Other countries argue that the commission’s plan misallocates the money, giving too much to eastern Europeans who were never on the front lines of the pandemic.

Launching a busy three weeks of shuttle diplomacy ahead of the summit, French President Emmanuel Macron will visit the Netherlands on Tuesday for talks with Prime Minister Mark Rutte.

At a virtual EU summit on Friday, Rutte told leaders he did not believe “an enormous rush is needed”.

Macron, for his part, said it was “essential… to quickly reach an ambitious agreement.”

Leaders pledge to agree on recovery package next month

EU leaders held “constructive” discussions on Friday on the EU’s €750 billion recovery fund to overcome the coronavirus crisis, and pledged to reach an agreement next month, despite the enormous differences among the member states. 

Complicating matters still further, the recovery fund is linked to the EU’s long-term, seven-year budget, which leaders will negotiate in parallel.

This has countries usually on the receiving end of EU spending — mainly in eastern Europe — worried that funds will now go elsewhere.

The leaders last met physically in February and broke up after two days of talks without a deal on the EU budget. Because of health safety rules during the pandemic, subsequent meetings were by videolink.

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