{"id":15181,"date":"2020-06-19T11:40:13","date_gmt":"2020-06-19T15:40:13","guid":{"rendered":"http:\/\/irishexaminerusa.com\/wp\/?p=15181"},"modified":"2020-06-20T08:42:16","modified_gmt":"2020-06-20T12:42:16","slug":"eu-leaders-make-little-progress-towards-coronavirus-stimulus-plan","status":"publish","type":"post","link":"https:\/\/irishexaminerusa.com\/wp\/?p=15181","title":{"rendered":"EU Leaders Make Little Progress Towards Coronavirus Stimulus Plan"},"content":{"rendered":"

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European Commission President Ursula Von Der Leyen and European Council President Charles Michel at a news conference following the European summit in video conference format (Olivier Hoslet\/Pool)
<\/figcaption><\/figure>The European Central Bank’s chief warned that the European Union’s economy was in a “dramatic fall” due to the coronavirus crisis but EU leaders made little progress yesterday towards agreeing a massive stimulus plan.<\/p>\n

Christine Lagarde told a video-conference summit that the full effects of Europe’s worst recession since World War Two had yet to appear in the labor market and unemployment in the 19-country euro zone could jump to 10% from 7.3% now.<\/p>\n

Her stark message came as the bloc’s 27 national leaders settled in at their computer screens to discuss kick-starting economic growth. While they avoided a bruising bust-up, three hours of talks left them no closer to a final deal.<\/p>\n

“Timing is very important. We must reach a deal by the end of July,” Italian Prime Minister Giuseppe Conte told the gathering, according to sources. “In this historic debate, it’s Europe who should prevail.”<\/p>\n

Under discussion is the EU’s 2021-27 budget of about \u20ac1.1 trillion euros, and a proposal by the European Commission to borrow 750 billion euros from the market to replenish a new recovery fund to help revive economies hardest hit by coronavirus, notably Italy and Spain.<\/p>\n

With more than 100,000 deaths from COVID-19, the EU is keen to demonstrate solidarity after months of bickering that has dented public confidence and put the bloc’s global standing at risk after its buffeting from Brexit.<\/p>\n

Lagarde said financial markets were relatively calm because of expectations that bloc would act to show “the EU is back”, according to sources briefed on the discussion.<\/p>\n

But many divisions remain, with Austrian Chancellor Sebastian Kurz saying: “The recovery fund must not be an entry into a permanent debt union – there must therefore be a clear time limit.”<\/p>\n

“It is also necessary to discuss what the money is spent on, how it is distributed and what conditions help should be linked to,” he said of a demand firmly rejected by the ailing south.<\/p>\n

Another diplomatic source said an in-person summit of EU leaders in mid-July was tentatively scheduled to try close the gaps.<\/p>\n

The fiscally conservative northern countries are at odds with the high-debt “Club Med” group of southerners over the size and terms of the recovery fund, which the Commission has suggested be split into two-thirds grants and one-third loans.<\/p>\n

The Netherlands, Denmark, Sweden and Austria – the “Frugal Four” – say the fund is too large and should be used only as loans, since grants would have to be repaid by all EU taxpayers.<\/p>\n

They want the funds to be clearly linked to pandemic recovery and say recipients must commit to economic reform.<\/p>\n

Eastern EU countries say too much money will go to the south and want spending to focus on agriculture and closing development gaps with the richer west.<\/p>\n

The latter group, in turn, wants to stick to its rebates on contributions to the bloc’s joint coffers, which others want to phase out.<\/p>\n

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