October 25, 2020

Spain and Italy join forces to avoid cuts in the European recovery fund


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The governments of Spain and Italy have united on a common front during the summit of European leaders to claim that the 750,000 million euros are not cut Planned for the European recovery fund after the pandemic, which they consider the “minimum” acceptable, diplomatic sources said.

The Spanish and Italian delegations also defend, like the vast majority of member states, that countries cannot have the right to veto when approving the plans that states will have to present to receive financing from the post-pandemic recovery fund.

Madrid and Rome oppose the Netherlands, which is the only country of the Twenty-seven that advocates that these plans for reforms and investments have to be unanimously approved and thus it has defended during the negotiations, according to the same sources.

In the compromise proposal that the community leaders debate from early this morning, the President of the European Council, Charles Michel, bet that the countries had to approve them by qualified majority (the favorable vote of 55% of the Member States, which represent at least 65% of the EU population).

This strengthens the initiative that the European Commission had initially proposed, which proposed that countries have to give a binding opinion on the plans at the level of technical committees -without involving ministers- and in a procedure that does not provide for the right to veto.

According to diplomatic sources, the Spanish President, Pedro Sánchez, and the Italian Prime Minister, Giuseppe Conte, have indicated that they are not willing to go further of the approval by qualified majority proposed by Michel.

The heads of state and government of the EU have been “immersed in intense discussions” since early this morning, although the sources pointed out that “it is still too early to say which way the negotiations are taking”, since for the moment They have not gone into the details.

Until now, the negotiation has focused on the governance of the fund, the size of the multi-annual budget for 2021-2027, together with the discounts that the Netherlands, Austria, Sweden, Denmark and Germany receive in their contribution, as well as the size of the recovery fund and the balance of transfers and loans.

According to sources, several proposals have been put on the table to further reduce the ceiling of the multiannual budget, than the compromise proposal. figure at 1,074 billion euros, and in the parts of the recovery fund that are not the Instrument for Recovery and Resilience.

This instrument is the main pillar of the recovery fund and is endowed with 560,000 million euros of the total of 750,000 million expected for the fund, a total of which two thirds would be disbursed in the form of lost fund transfers and the rest in the form of loans.

Regarding discounts, the compensations that allow various countries to reduce their contribution to the community coffers for being net contributors, the sources assured that Denmark is leading the front in its defense, while France demands its total elimination.

The sources noted that “the temperature in the room has not risen too high” yet and that the leaders “seem to be reserving for what is to come tomorrow», Referring to the second day of this key summit for the recovery of the European economy after the coronavirus crisis.

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