Meseberg, 30 June 2020 (dpa/MIA) – German Chancellor Angela Merkel signalled that she is open to compromise on plans for an EU coronavirus recovery fund, but warned against watering it down too much, after meeting with French President Emmanuel Macron for talks on Monday.
Macron, who met with Merkel at the German government retreat at Schloss Meseberg, north of Berlin, also stressed that the fund needs to be effective and defended the price tag of the current proposal.
France and Germany, as well as southern countries hard hit by the virus, are backing a European Commission proposal for a recovery fund including 500 billion euros (565 billion dollars) in budgetary transfers and 250 billion euros in loans.
But a group nicknamed the “frugal four” – Austria, Denmark, the Netherlands and Sweden – are opposed to large grants without any reform conditions attached.
EU leaders held an inconclusive video meeting earlier this month and are due to meet up in person on July 17-18 to try to reach agreement on the recovery package and the bloc’s budget for 2021-2027.
“What’s important to me is that we come out of the debates with a strong instrument,” Merkel said. While the European Commission’s proposal will obviously be revised, “there has to remain a fund that helps, which really helps those countries that otherwise are threatened with being affected much more severely by the crisis.”
The “heart” of the restart funds has to be subventions, “because that’s what has an impact on the economies that have been badly affected,” Macron argued.
He warned the “frugal four” that they were acting against their own best interests. They “gain a lot – more than others – from taking part in a common space of prosperity and exchange,” he argued.
“And so it is not in their interest to see some members, especially important markets in the European economy, affected.”
Macron’s visit to Dutch Prime Minister Mark Rutte in The Hague on Tuesday had led to some progress and it was in everyone’s interest to reach agreement in July, an Elysee Palace source argued last week.
Merkel and Macron also expressed German-French unity, saying that both countries intended to play a role over the months ahead that made clear: “Europe is our future.”
“Expectations are high,” Merkel said in reference to Germany’s presidency of the EU starting July 1, but Berlin and Paris could make a contribution to a “positive impulse in the right direction for Europe’s future.”
The German government hopes to leave the summit with a compromise, starting off its six months of EU presidency on the front foot and adding another feather in Merkel’s cap a year before her term ends.