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Our View: Historic EU deal would not have been possible last year

European leaders at the summit

For the EU it has always been a case of all’s well that ends well. The obligatory rowing, digging in of heels, haggling, posturing and horse-trading inevitably ends in a compromise that all member-states accept, willingly or grudgingly. There can be no other way of reaching some form of consensus in a bloc of 27 states, each looking after its own interests and trying to limit the concessions that have to be made for an agreement.

It took the leaders four-and-a-half days to reach an agreement and the Commission’s original proposal had to be significantly modified, but this was understandable considering it was a historic budget and recovery package, the biggest ever put together by the EU. Having signed off the deal, everyone is ready to move on. As the head of the European delegation Ierotheos Papadopoulos told a morning radio show, once the baby is born the labour pains are forgotten.

Changes to the Commission’s original proposals were made in how the €750 billion recovery fund, that would be jointly borrowed, would be allocated. The €500 billion in grants was reduced to €390bn and the loans increased to €360bn. This total will be attached to the new €1,074 trillion seven-year budget, known as the Multiannual Financial Framework (MFF), which was also reduced from the proposed €1.1 trillion. This was achieved with cuts in the MMF for health, research, environment and external action.

The European Parliament’s budget team has already expressed reservations about the deal, saying in a statement it could not accept the “proposed record low ceilings” on health, research and climate change, which parliament considered priorities. MEPs said they would “strive to secure improvements including higher amounts” for programmes such as Horizon Europe, Invest EU, the LIFE environment programme and Erasmus, the Politico website reported.

While not everyone will be happy with what was agreed, the fact remains that the European Commission, with the strong support of Chancellor Merkel and President Macron, pulled off a historic agreement that would have been thought inconceivable last year. The Union will help the indebted countries of southern Europe deal with the consequences of the coronavirus without increasing their debt levels.

It was an admirable show of solidarity and unity even though in the end the frugal four – the Netherlands, Austria, Denmark, Sweden – had to be granted unprecedented concessions to back the recovery plan which they had been stridently opposing ever since it was broached several months ago. In the end they agreed to grants based on mutualised loans worth €390bn and that is all that really matters.

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