Italy will not accept ‘weak compromise’ on EU recovery fund, PM says

Portuguese Prime Minister Antonio Costa (R) welcomes his Italian counterpart Giuseppe Conte (L) at his arrival to Sao Bento official residence in Lisbon, Portugal, 07 July 2020. Giuseppe Conte is in Portugal for a meeting about the next European Council, to be held on 17-18 July in Brussels. [EPA-EFE/TIAGO PETINGA]

Italian Prime Minister Giuseppe Conte said on Tuesday (7 July) the European Union must act decisively to build a common response to the economic crisis caused by the COVID-19 pandemic, urging that support measures be activated rapidly.

“We won’t accept a weak compromise” on an EU Commission proposal to build up a recovery fund to finance the bloc’s coronavirus-battered economies, Conte told reporters in Lisbon speaking alongside Portuguese Prime Minister Antonio Costa.

“The response has to be a strong, ambitious political response,” he said.

EU leaders still have to agree on the makeup of any recovery package, and a meeting on the recovery fund and the next joint EU budget will take place in Brussels on July 17 and 18.

Significant differences among member states remain on key issues, including whether the recovery fund will be based on loans or outright grants to those in need.

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. 

The so-called frugal countries – the Netherlands, Austria, Denmark and Sweden – insist the fund should be used to issue loans, since grants would have to be repaid by all EU taxpayers.

In a recent interview with Italian daily newspaper Corriere della Sera, Dutch Prime Minister Mark Rutte said a deal could eventually be reached on the fund structure. But he continued to argue against grants.

The grants scheme is strongly supported by the southern EU members, including Italy, whose public accounts have come under huge pressure because of the economic crunch caused by the pandemic.

Conte hopes the next European leaders meeting – the first such in-person talks in months due to travel restrictions – will push the negotiation towards the result Rome hopes to achieve.

He will travel to Madrid on Wednesday to confer with his Spanish counterpart, Pedro Sanchez, as the southern countries continue to seek a common position to bring to the European table.

How EU member states reacted to the Commission’s Recovery Fund proposal

Most EU member states have reacted positively to the European Commission’s €750 billion  Recovery Fund proposal, which aims to help the bloc cope with the devastating economic implications of the pandemic.

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