For Italy, time is of the essence, Conte tells Merkel

Giuseppe Conte and Angela Merkel speaking in the garden of Meseburg Castle. [EPA-EFE | Hayoung Jeon]

Five days before an EU summit that could adopt a historic EU budget and a recovery fund, Italian Prime Minister Giuseppe Conte met Angela Merkel in Berlin. Both support a generous aid fund and both want an agreement at the weekend. But for Conte, the economic survival of his country is at stake. EURACTIV Germany reports.

European leaders have been flying all over the continent for weeks, greeting each other at a distance and giving joint press conferences.

This is due to the potentially historic European Council in Brussels this weekend. The 27 leaders will meet in person for the first time in months to negotiate and possibly decide on the EU’s seven-year budget (the Multiannual Financial Framework or MFF) and the “Next Generation EU” aid fund.

Council President Charles Michel presented his proposal on Friday (10 July) but opinions continue to differ, and this is where personal meetings can help.

Conte came to Berlin for such a meeting, and he discussed with Chancellor Merkel how to reach an agreement on Friday (17 July).

Time is pressing, especially for Italy, Europe’s leader in terms of infections, deaths and economic damage. While Merkel was still comparatively relaxed when she said that an agreement this weekend would be “definitely good,” Conte emphasised the importance of speed.

“We must act quickly. The best reaction is not worth much if it comes too late,” he said, because “if we let the crisis continue, it will destroy the internal market.”

EU to face difficulties without a deal on recovery plan, Budget Commissioner warns

If EU leaders fail to reach an agreement on a pandemic recovery package next week, “we will enter into difficulties,” the EU Commissioner for Budget, Johannes Hahn, warned during an event in Brussels on Tuesday (7 July).

Conte against the detail-loving Council

However, Italy is not going to simply accept Michel’s proposal. Conte said that it “also contains critical points.” For example, the conditionalities for aid money.

According to the proposal, countries are to submit their own recovery plans in line with the recommendations of the European Semester, which will then be approved by the Commission and finally by the Council, albeit not unanimously but by majority vote. This means that individual countries cannot block aid funds.

Conte said that he “absolutely agrees that the Council has a say.” He also supports strict monitoring of the implementation of the plans. However, it is “not the Council’s task” to get lost in the “technical details” of the plans.

Foreign aid to be big loser from EU budget under Michel plan

EU external and development spending is in line to be the biggest loser from next week’s crunch EU budget summit in Brussels. The blueprint outlined on Friday (10 July) by European Council President Charles Michel includes a reduction of €4.7 billion for the Neighbourhood Development and International Cooperation Instrument in the EU’s next seven-year budget.

The background is probably the Italian concern that EU funds will be tied to a tough austerity policy, as was the case in Greece during the previous crisis. The main driver of this approach at the time was Merkel’s Germany.

Merkel, on the other hand, welcomed Michel’s proposal and also called the idea to decide by qualified majority “a good thing that I could support.”

With a view to Germany’s citizens, Merkel once again called for solidarity in overcoming the crisis, also in financial terms.

According to the Chancellor, the Italian negotiating position represented “no difficulties whatsoever” for the project. In the past, Conte had also advocated granting subsidies, which would not have to be repaid.

Donohoe wins Eurogroup presidency

Ireland’s minister of Finance, Pascal Donohoe, will be the next Eurogroup chief, outgoing president Mario Centeno announced.

Developments in Hong Kong “worrying”

The two also touched upon EU-China relations during the press conference. Merkel repeated the claim that it was important for the EU to speak with one voice when it comes to China. She described the developments in Hong Kong as “worrying” but said she saw “no reason not to continue talks with China.”

EU-China relations, and possible reactions to the introduction of the Security Law in Hong Kong, were also on the agenda of Monday’s meeting of EU foreign ministers.

The representatives of the member states said they would refrain from sanctions for the time being but agreed to ban the export of tear gas and to facilitate the right of residence for Hong Kong citizens in the EU.

[Edited by Sarah Lawton/Zoran Radosavljevic]

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