(PM) – Leaders of the European Union struck an agreement for a post-coronavirus pandemic recovery package on Tuesday after four nights of talks that featured a split between countries hard-hit by the virus and governments wary of the enormous costs.
In the biggest joint-borrowing ever carried out by the 27-member bloc, the deal involved $859 billion US in grants and loans in a decision hailed as “a pivotal moment” for Europe by summit chair Charles Michel.
The summit began in the EU capital Brussels on Friday, with leaders engaged in more than 90 hours of talks, one of the longest negotiations in recent memory. The talks were considered critical to the EU’s viability.
European Council President Michel tweeted “deal” shortly after 5:15 a.m. local time. The euro rose to a four-month high of $1.1470, Reuters news agency reported.
“This agreement sends a concrete signal that Europe is a force for action,” Michel told reporters, appearing tired but pleased with the end result.
The agreement allows the European Union’s executive branch to raise billions of euros on capital markets on behalf of the entire bloc. The accord is highlighted by a $446 billion of grants to member states hit hard by the pandemic, with Italy and Spain receiving the bulk of the cash.
To reach the deal, a showdown occurred between the so-called “frugal four” and other nations. Led by the Netherlands, Denmark, Austria and Sweden — sometimes with Finnish backing — opposed such measures as a proposed €500 billion in grants.
Though €390 billion was agreed to in the end, the frugal group said they would not want to exceed €375 billion and wanted the ability to block requests for cash. Others, such as hard-hit Italy and Spain, wanted at least €400 billion available.
