The EU Accord

source: le Figaro

author: Anne Rovan

translation: GoogleTranslate/doxa-louise

The Twenty-Seven agree on a recovery plan worth 750 billion euros

Members of the EU have agreed on the mind-bending envelope intended to restart the economies of the bloc. It will be financed by a common loan. Rebates, rule of law, climate ... Many concessions have been made to ensure a compromise

At the end of a marathon summit, the Franco-German joint loan project was finally adopted by the European Union on July 21. The Europeans, however, had to grant concessions to "frugal" countries, particularly on costly discounts.
The Twenty-Seven will be able to go on vacation with a much lighter mind, telling themselves that they have put EU affairs in order. Tuesday July 21, shortly after 5 a.m., at the end of a rough and tortuous negotiation of four days, that is to say 92 interminable hours , they agreed on a plan of recovery worth 750 billion euros. Its staggering volume is identical to that proposed at the end of May by the Commission. Its ambition is no less so since it is to be the first common loan for the Twenty-Seven. A further step towards integration which should almost automatically lead to others.


Charles Michel as well as Angela Merkel and Emmanuel Macron, maneuvering throughout the summit, welcomed this agreement. " We have demonstrated that European magic works, that when we think it is impossible, there is resilience, thanks to mutual respect and the ability to cope by being united, beyond differences ", welcomed Charles Michel, speaking of " a pivotal moment in the European journey ". The ex-Belgian prime minister, who had failed the EU budget in February, looked relieved to succeed on the very day of Belgium's national holiday. It is " a summit whose conclusions are historic ", greeted the president, and emphasizing the effort and concern for  compromise it required ”. Less lyrical, Angela Merkel said she was " very relieved " that after difficult negotiations, Europe has shown that it " can still act together ". This is " an important signal which goes beyond Europe ", " a response to the biggest crisis of the EU since its creation ", she said.


If it is intact in terms of amount at the end of this difficult summit, the composition of the European recovery plan has, on the other hand, changed a bit compared to that which had been put on the table by the President of the Commission, Ursula von der Leyen. And, we have to admit that it loses some of its power in the process. The amount of subsidies intended to revive and modernize the bloc's economies shaken by the coronavirus crisis has been reduced to 390 billion euros, instead of the 500 billion that France and Germany jointly pushed in the name of European solidarity in the face of the Covid-19 crisis. Conversely, the loans made available to Member States are increasing, going from 250 billion to 360 billion. The frugal camp, who favored loans and did not want to deal with outright grants , therefore obtained a small victory since the share of the money that will need to be repaid has increased. A symbolic victory knowing that the loans are incidental. Only grantss count.

France will receive 40 billion to finance its recovery plan

In any case, the volume of direct subsidies granted to Member States to boost and strengthen their economies - Italy and Spain in the lead - is preserved. For good measure, and because it is, as the Elysee insists, the " heart of the reactor ", they are expanded by some 2 billion euros, rising to 312.5 billion euros. France is doing well. It will receive 40 billion instead of 35 to help finance its recovery plan. Subsidies granted to Italy are down by 200 million euros to 81.4 billion. Spain also loses.

To preserve the " heart of the reactor " and because it was necessary " to fit the downcover in the suitcase ", some of the subsidies which were to come to supplement the European budget are seriously amended. This is the case for those dedicated to health and research. This is also the case with the just transition mechanism, intended to support highly carbon-intensive Member States towards neutrality by 2050, which are plunging from 30 to 10 billion euros. The solvency instrument that was supposed to support companies in difficulty - 26 billion euros - will never see the light of day. Here are some of the figures contained in the arid agreement of the Twenty-Seven and which inevitably reveal many other surprises and acrobatics.

The so-called normal European budget - that is to say excluding the recovery plan - amounts to 1074 billion euros versus 1100 billion expected by the Commission. While it had given rise in February to  many clashes with the so-called “frugal” countries - the Netherlands, Austria, Sweden, Denmark - the multi-year budget this time passed by a hair. The “ thrifty ”, who did not want to go beyond 1000 billion at the start of the year, had to choose what to fight for.

To reach this agreement, the Twenty-Seven have made more concessions - something the President of the Commission, Ursula von der Leyen and Emmanuel Macron readily admitted . " The agreement is no less good because concessions have been made, " he argued, wishing to retain only the revolutionary side of this recovery plan. “ There is no such thing as the perfect world ,” he commented.

Emergency brake

Mark Rutte, very suspicious when it comes to " easy money " and riding on reforms, obtains his emergency brake allowing one or more member states to freeze the subsidies promised to a country if the proposed stimulus is not considered relevant or if its implementation is too slow or unsatisfactory. This instrument carries with it the seeds of future battles between the Twenty-Seven.

The frugal, who were the toughest in the negotiations, are not only getting their discounts maintained after the UK has left the EU. They even see these rebates increase because of the stimulus plan. In the end, this will cost the EU's net contributors - including France - € 53 billion over the next seven years, or € 7 billion more than over the current period. Above all, it amounts to setting this rebate in stone. Customs duty collection costs are also increased from 10% to 25%. A beautiful and juicy operation for the Netherlands, Belgium and Germany, which are home to the largest ports in the EU, entry points to the internal market. It was a request from Dutch Prime Minister Mark Rutte. His country will pocket more than 200 million euros more each year. The price to pay for trying to appease Dutch people allergic to "easy money ”and a not very docile national Parliament, where the coalition led by Rutte does not have a majority. " I am happy with this agreement, I see no disappointment, " Mark Rutte welcomed during a very long press conference.

To convince Poland and Hungary, the Europeans took care not to push the fires on conditionalities in terms of the rule of law. Ditto with climate requirements. The objective of carbon neutrality by 2050 is now a European objective and not a national objective for each Member State. To the great relief of Poland, which sees, so to speak, the horizon brightening. Enough to overshadow the fact that 30% of the sums spent between 2021 and 2027 by the EU will be directed towards  climate cange.

This agreement between the Twenty-Sept is only the starting point of a long and perilous journey. It will be set out in some fifty legislative texts. As the EU will increase its resource cap in order to allow the Commission to borrow this money on the financial markets, it will also require the prior approval of the EU's national and regional parliaments before the end of the year. Obtaining this stamp will be a test for the fragile coalitions of the countries of northern Europe. “ Do you have a plan B? Recently asked a journalist. " No ", answered the European civil servant questioned.