Azernews.Az

By Trend

European Union leaders failed to agree on a massive stimulus fund to revive their coronavirus-hammered economies on Saturday after two days of fraught negotiations, but extended their summit for another day to try and iron out their differences, Trend reports citing Reuters.

As the 27 leaders scurried back to their hotels after a late dinner at the conference hall in Brussels, a source close to summit chairman Charles Michel said they would be handed new proposals before they reconvene at noon (1000 GMT) on Sunday.

With the pandemic dealing Europe its worst economic shock since World War Two, leaders gathered on Friday to haggle over a proposed 750 billion euro ($856 billion) recovery fund and a 2021-27 EU budget of more than 1 trillion euros.

But a group of wealthy and fiscally “frugal” northern states led by the Netherlands blocked progress in the first face-to-face EU summit since spring lockdowns across the continent.

They favour repayable loans rather than free grants for the hard-hit indebted economies mostly on the Mediterranean rim, and they want control over how the funds are spent.

Hopes for an agreement grew earlier on Saturday when Michel proposed revisions to the overall package designed to assuage the Dutch concerns. Under his new plan, the portion of grants in the recovery fund would be reduced to 450 billion euros from 500 billion and an ‘emergency brake’ on disbursement would be added.

But hopes that this would be enough faded quickly, and even before the leaders went in for dinner, Italian Prime Minister Giuseppe Conte made it clear the chances were bleak.