by N. Peter Kramer
After having left the lead in earlier Summit discussions on an EU recovery fund to The Netherlands, Chancellor Angela Merkel took the reins this time around. Without trying to resolve the deep divisions in the Council, leaders agreed to task Merkel’s former Minister of Defense and now President of the European Commission, Ursula Von der Leyen, with creating a recovery fund to fuel the EU economies once lockdowns ease. Von der Leyen said of the fund, ‘we are not talking about billions, we are talking about trillions’, including borrowing on the market.
On May 6, the Commission must put forward a draft proposal for a new long-term budget, the multiannual financial framework (MFF), including a plan to finance the economic recovery from the coronavirus crisis. According to Politico, Angela Merkel asked Von der Leyen to confirm the date. When she did so, the chancellor replied, “don’t forget to talk to us”.
But agreeing a new MFF that includes the recovery fund will be difficult given the still existing differences among the EU’s north and south over the form any aid emerging from the fund should take. France, Italy, Spain and Portugal led demands for grants. However, Chancellor Merkel insisted that any funding borrowed on the markets must be paid back. There are ‘limits’ she said, on what could be offered, adding that grants ‘do not belong in the category of what I can agree’. The Dutch Prime-Minister Mark Rutte, hearing Merkel’s remarks, probably nodded in agreement. And this time the Portuguese colleague, Antonio Santos da Silva, did not ask that Germany leave the EU, as he did with The Netherlands last time.
North is north, south is south, will the twain ever meet? (Loosely after Rudyard Kipling.)