EU summit: Leaders reach landmark €1.82 trillion COVID-19 recovery deal

[alani123]

EU leaders reached a landmark €1.82 trillion COVID-19 recovery package early Tuesday morning.

It comes after days of sometimes bitter discussions over the seven year budget and recovery package which includes jointly borrowing a €750 billion recovery fund to be shared as grants and loans.

Source: https://www.euronews.com/2020/07/20/eu-summit-deadlock-see-talks-stretch-into-sunday
Alternative source: https://www.ft.com/content/713be467-ed19-4663-95ff-66f775af55cc

Long overdue deal between EU countries for an assistance package has finally been finalized. It's a historic deal of great proportions. The compromise seems to have come in the fact that around half of the funds will be borrowed.

EU country leaders would like to project that they union is sturdy and stable, but the concession that had to be made might show otherwise. Countries that were notorious for their opposition to the deal initially had great offers made to them for their budget rebates. Essentially now, already rich northern countries that contribute little to the EU will be earning more, all over a pandemic that affected them less than the south. Just the fact that this compromise had to be made only for the deal to pass for me shows some weakness in EU's mechanisms.

[1715438376]

1715438376

[Upgrade00]

There were so many split interests during the summit and this most likely led to the length of the discussions before a compromise was eventually met. Each leader was seeking out the best interests of his/her people and looking to secure voter supports back at home.

Fractions in the EU also indicated a lack of togetherness and it'll be seen if the EU can maintain its motto and remain United in diversity regarding future meetings and other necessary concessions.

[DoubleEdgeEX]

It´s easy to seperate 1 entity in 50 seperate ones, but it seems utterly impossible to unite 30 parts into 1. As a European, I think  it´s positive, since it´s in almost every country the same situation that there are already so many different regions that want to have different things compared to e. g. what happens in most capital cities. That makes it even worse on a bigger scale, like why should a cattle farmer from the French alps have a vote on Bulgarias refined petroleum industry? I give this EU till 2030, I don´t know even one person who enjoys being in that union....

[Vishnu.Reang]

It´s easy to seperate 1 entity in 50 seperate ones, but it seems utterly impossible to unite 30 parts into 1. As a European, I think  it´s positive, since it´s in almost every country the same situation that there are already so many different regions that want to have different things compared to e. g. what happens in most capital cities. That makes it even worse on a bigger scale, like why should a cattle farmer from the French alps have a vote on Bulgarias refined petroleum industry? I give this EU till 2030, I don´t know even one person who enjoys being in that union....

EU has benefited some of the countries, while it had a detrimental effect on some others (such as the United Kingdom). For example, the Eastern European countries such as Poland, Estonia, Lithuania.etc benefited enormously from the EU membership. The citizens in these countries got the perimission to live and work in Western European nations such as UK, France and Germany. As a result, the economy of these nations received an enormous boost. On the other hand, countries such as Germany have also benefited from the EU. Germany, under Angela Merkel dominates the smaller nations, deciding most of the government policies. So it is mutually beneficial.

[audaciousbeing]

EU leaders reached a landmark €1.82 trillion COVID-19 recovery package early Tuesday morning.

It comes after days of sometimes bitter discussions over the seven year budget and recovery package which includes jointly borrowing a €750 billion recovery fund to be shared as grants and loans.

Source: https://www.euronews.com/2020/07/20/eu-summit-deadlock-see-talks-stretch-into-sunday
Alternative source: https://www.ft.com/content/713be467-ed19-4663-95ff-66f775af55cc

Long overdue deal between EU countries for an assistance package has finally been finalized. It's a historic deal of great proportions. The compromise seems to have come in the fact that around half of the funds will be borrowed.

EU country leaders would like to project that they union is sturdy and stable, but the concession that had to be made might show otherwise. Countries that were notorious for their opposition to the deal initially had great offers made to them for their budget rebates. Essentially now, already rich northern countries that contribute little to the EU will be earning more, all over a pandemic that affected them less than the south. Just the fact that this compromise had to be made only for the deal to pass for me shows some weakness in EU's mechanisms.

While it is commendable that EU is coming to provide succor and plans on how to recover the economy, it is still something appalling to see that close to 50% of the amount is to be borrowed and the concern from me is then that from which country do they want to borrow or from which set of individuals or corporations?

If they go the route of countries does that mean that the same other countries that are also trying as much as possible to boost their own economies would be willing to dole out such huge bailout to another group of countries.

If they are going the route of corporations, then it means that the same corporations they are planning to bail out in terms of grants and loans are the same set of people they want to borrow from.

All of these just beats imagination that majority of the handlers of the economies do not have a solid economic plan and what they are doing is trial and error hoping that one will work out.

[Febo]

EU leaders reached a landmark €1.82 trillion COVID-19 recovery package early Tuesday morning.

That is not true. COVID-19 recovery package is €750 billion. €490 billion out of is given, the rest EU members will be able to lend.

Almost 1.1 trillion is a next 7 years EU budged. It has nothing to do with covid-19.

[Upgrade00]

That is not true. COVID-19 recovery package is $750 billion. $490 billion out of is given, the rest EU members will be able to lend.

You're right, the OP may have gotten that from the title of the article. I found this image online while looking up more about the situation and it describes how the amount is to be spent;

[Darkoth89]

It´s easy to seperate 1 entity in 50 seperate ones, but it seems utterly impossible to unite 30 parts into 1. As a European, I think  it´s positive, since it´s in almost every country the same situation that there are already so many different regions that want to have different things compared to e. g. what happens in most capital cities. That makes it even worse on a bigger scale, like why should a cattle farmer from the French alps have a vote on Bulgarias refined petroleum industry? I give this EU till 2030, I don´t know even one person who enjoys being in that union....

I enjoy beeing in that union Don't you agree that an united and peaceful Europe is amazing?! After 75 years of peace, people in Europe seem to have forgotten how lucky we are, living in such a peaceful period. The European Union brings mobility with borderless travel. We have a common currency so no silly currency exchanges necessary anymore.  Its common market makes trading easier and more efficient and brings economic prosperity to its members. And last but not least, I am glad that the EU can be a haven of reason in a time when Trump, Putin and China etc. seem like out of their mind.

Sure, the EU has its flaws and the crises of recent years (the 2010 Euro crisis, refugee crisis, Brexit ...) made people question the idea of the European Union. But I, for my part, would be horrified if all this fails and we go back to a situation where every nation thinks only about itself.

[Kakmakr]

It is deals like this that are going to finally break the Camel's back... Most of these countries are already deep in debt and their economy are past the point where they can ever repay that debt. We saw what happened during the Bank crisis when the PIGS countries got bailout after bailout and they just sank deeper into the debt spiral.

The lender always have a hidden agenda and I think they are doing the same thing that has been done with 3rd world countries.. get them so deep in debt that you can have leverage to reach any goal you want in their country. 

[beerlover]

I guess borrowing really is not something we need, plus recovery is only recovery if the companies can use it very wisely and can get back on their feet, if whoever ends up with that money (not one person obviously, just in general) doesn't use it smartly, they would continue to fall. There needs to be some sort of system where we can be sure where the money goes, and that is only available if you pay it as government instead of actually giving it away.

A company can't pay workers? Pay the salary as government on companies behalf, do not give them money to pay it. A guy can't pay his bills? Pay his bills on his stead, do not give him money to pay the bills. If they do something like that, I am sure recovery in economical sense will be much better and much faster, we would be certain about where the money goes.

[Febo]

That is not true. COVID-19 recovery package is €750 billion. €490 billion out of is given, the rest EU members will be able to lend.

You're right, the OP may have gotten that from the title of the article. I found this image online while looking up more about the situation and it describes how the amount is to be spent

But on the other side is very strange to me that 7 years EU budged is only 50% more then will be this covid-19 relief.  Yes of course each European country have its own budged beside this one but still. I just tells us how much €750k  is.

[alani123]

I guess borrowing really is not something we need, plus recovery is only recovery if the companies can use it very wisely and can get back on their feet, if whoever ends up with that money (not one person obviously, just in general) doesn't use it smartly, they would continue to fall. There needs to be some sort of system where we can be sure where the money goes, and that is only available if you pay it as government instead of actually giving it away.

A company can't pay workers? Pay the salary as government on companies behalf, do not give them money to pay it. A guy can't pay his bills? Pay his bills on his stead, do not give him money to pay the bills. If they do something like that, I am sure recovery in economical sense will be much better and much faster, we would be certain about where the money goes.

Well the plan to use the money supposedly will have to be approved specifically for the intended use to be growth and long term development. There can be a a veto from majority (not even complete majority) and that was specifically targeted so countries that have undermined democracy for example Poland and Hungary.

The Union's financial interests shall be protected in accordance with the general principles embedded in the Union Treaties, in particular the values of Article 2 TEU*.

The European Council underlines the importance of the protection of the Union's financial interests. The European Council underlines the importance of the respect of the rule of law.

Based on this background, a regime of conditionality to protect the budget and Next Generation EU will be introduced. In this context, the Commission will propose measures in case of breaches for adoption by the Council by qualified majority.

*Article 2: The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.

Qualified majority means 55% of EU member states representing 65% of the Union's population

Hopefully though the north countries will not sabotage plans of southern ones over this... We can only wait and see.

[Cnut237]

Hopefully though the north countries will not sabotage plans of southern ones over this... We can only wait and see.

That was my thought as well. Given past history, and the fact that all economies are under strain due to the pandemic, we can expect some tension between member nations. Italy and Spain were badly hit, but so was France in the north. Greece escaped the pandemic with few infections... but the south, and Greece again, is particularly reliant on tourism, which for obvious reasons is the worst-hit industry.

I wouldn't be at all surprised to see tensions once again between north and south, and once again between Germany and Greece. Greece's problem this time not being economic profligacy, but simply its geographical position.

[Lucius]

I give this EU till 2030, I don´t know even one person who enjoys being in that union....

Well, there are actually those who enjoy it, because it is good for some to be able to travel across borders without passports, that most countries have a single currency and that they feel safe because of that old Latin saying Vires in Numeris (strength in numbers). But it is no secret that the EU is far from an ideal union, and that some of its strengths are in fact its greatest weaknesses.

I enjoy beeing in that union Don't you agree that an united and peaceful Europe is amazing?! After 75 years of peace, people in Europe seem to have forgotten how lucky we are, living in such a peaceful period. The European Union brings mobility with borderless travel. We have a common currency so no silly currency exchanges necessary anymore.  Its common market makes trading easier and more efficient and brings economic prosperity to its members. And last but not least, I am glad that the EU can be a haven of reason in a time when Trump, Putin and China etc. seem like out of their mind.

Of course we enjoy peace, but have you forgotten all the American military bases that have been located throughout the EU for 75 years? The EU itself does not have much to do with the fact that there is currently peace, someone else is preventing us from going to war and that is a fact. Borderless travel is also good for terrorists, arms and drug smugglers, human traffickers... And as for the common currency, not all member states have it - and if only one member of the EU zone sinks, it will drag everyone else to the bottom - unless you think the EU saved Greece because Angela Merkel has a good heart?

You should also know that in relation to the USA, China or Russia, the EU is the weakest in every sense - and here I am thinking primarily of military defense capabilities, a common currency that is a time bomb and diametrically conflicting interests among members.

Not to mention that any EU enlargement is a gain for the western EU, and a terrible demographic blow for the eastern EU - hundreds of thousands of people are leaving their countries permanently. Big fish eat small fish, and when there are no more small fish, big fish will start eating each other.

[Darker45]

I guess borrowing really is not something we need, plus recovery is only recovery if the companies can use it very wisely and can get back on their feet, if whoever ends up with that money (not one person obviously, just in general) doesn't use it smartly, they would continue to fall. There needs to be some sort of system where we can be sure where the money goes, and that is only available if you pay it as government instead of actually giving it away.

A company can't pay workers? Pay the salary as government on companies behalf, do not give them money to pay it. A guy can't pay his bills? Pay his bills on his stead, do not give him money to pay the bills. If they do something like that, I am sure recovery in economical sense will be much better and much faster, we would be certain about where the money goes.

I suppose the EU leadership is competent enough to deliver as promised. I don't have much idea as to whether or not corruption or the lack of integrity and competence among European leaders is a problem, but I am quite sure that in so many countries, especially developing ones, it does not make things better if you delegate such responsibility to the government.

If you don't trust private companies or individuals or families with the money, there is no assurance whatsoever that the money and the spending are better off in the hands of the government. As a matter of fact, even the distribution of recovery funds might actually end up done in a very unfair way, probably prioritizing those who's got connections with powerful officials in the government rather than those that really need it.

The government which I belong to even failed in properly and fairly distributing the most basic assistance like canned goods and rice. If I can't trust them with canned sardines, how could I trust them with money?

[dothebeats]

The EU is in shambles right now, with so many leaders going for the huge slice of the pie for their people in order to gather the support of their countrymen for political reasons. With a lot of individual sentiment and suggestions going on on that summit, it's a miracle for them to reach a compromise. They said two heads are better than one, but in this example, 27 states did worse, depends on how you look at it. While there are benefits on being included in a union like EU, there are also some cons, as portrayed greatly by this summit.

I mean, we're in the midst of the pandemic. Why not gather ourselves and do things together rather than try to get a better share compared to others?

I wouldn't be at all surprised to see tensions once again between north and south, and once again between Germany and Greece. Greece's problem this time not being economic profligacy, but simply its geographical position.

And after this is long over, we'll praise Merkel once again for saving Greece's ass the second time around.

[spy100]

EU leaders reached a landmark €1.82 trillion COVID-19 recovery package early Tuesday morning.

It comes after days of sometimes bitter discussions over the seven year budget and recovery package which includes jointly borrowing a €750 billion recovery fund to be shared as grants and loans.

Source: https://www.euronews.com/2020/07/20/eu-summit-deadlock-see-talks-stretch-into-sunday
Alternative source: https://www.ft.com/content/713be467-ed19-4663-95ff-66f775af55cc

Long overdue deal between EU countries for an assistance package has finally been finalized. It's a historic deal of great proportions. The compromise seems to have come in the fact that around half of the funds will be borrowed.

EU country leaders would like to project that they union is sturdy and stable, but the concession that had to be made might show otherwise. Countries that were notorious for their opposition to the deal initially had great offers made to them for their budget rebates. Essentially now, already rich northern countries that contribute little to the EU will be earning more, all over a pandemic that affected them less than the south. Just the fact that this compromise had to be made only for the deal to pass for me shows some weakness in EU's mechanisms.

It's going to end up in local politicians pockets ... we the people will not get one cent ....

[Mauser]

EU leaders reached a landmark €1.82 trillion COVID-19 recovery package early Tuesday morning.

It comes after days of sometimes bitter discussions over the seven year budget and recovery package which includes jointly borrowing a €750 billion recovery fund to be shared as grants and loans.

Source: https://www.euronews.com/2020/07/20/eu-summit-deadlock-see-talks-stretch-into-sunday
Alternative source: https://www.ft.com/content/713be467-ed19-4663-95ff-66f775af55cc

Long overdue deal between EU countries for an assistance package has finally been finalized. It's a historic deal of great proportions. The compromise seems to have come in the fact that around half of the funds will be borrowed.

EU country leaders would like to project that they union is sturdy and stable, but the concession that had to be made might show otherwise. Countries that were notorious for their opposition to the deal initially had great offers made to them for their budget rebates. Essentially now, already rich northern countries that contribute little to the EU will be earning more, all over a pandemic that affected them less than the south. Just the fact that this compromise had to be made only for the deal to pass for me shows some weakness in EU's mechanisms.

Only 750 bn Euros are part of the corona recovery fund and out of that only 390 bn are outright subsidies for countries, the rest comes as loans from the EU. The biggest part of more than 1000 bn Euros is part of the budget for the next 7 years.So it will take some time for the money to be actually paid out.
And since the EU commission is raising money for the first time itself, the next generation will have to pay back these loans. Unfortunately its just another layer of debt being raised in the EU.

[alani123]

EU leaders reached a landmark €1.82 trillion COVID-19 recovery package early Tuesday morning.

It comes after days of sometimes bitter discussions over the seven year budget and recovery package which includes jointly borrowing a €750 billion recovery fund to be shared as grants and loans.

Source: https://www.euronews.com/2020/07/20/eu-summit-deadlock-see-talks-stretch-into-sunday
Alternative source: https://www.ft.com/content/713be467-ed19-4663-95ff-66f775af55cc

Long overdue deal between EU countries for an assistance package has finally been finalized. It's a historic deal of great proportions. The compromise seems to have come in the fact that around half of the funds will be borrowed.

EU country leaders would like to project that they union is sturdy and stable, but the concession that had to be made might show otherwise. Countries that were notorious for their opposition to the deal initially had great offers made to them for their budget rebates. Essentially now, already rich northern countries that contribute little to the EU will be earning more, all over a pandemic that affected them less than the south. Just the fact that this compromise had to be made only for the deal to pass for me shows some weakness in EU's mechanisms.

Only 750 bn Euros are part of the corona recovery fund and out of that only 390 bn are outright subsidies for countries, the rest comes as loans from the EU. The biggest part of more than 1000 bn Euros is part of the budget for the next 7 years.So it will take some time for the money to be actually paid out.
And since the EU commission is raising money for the first time itself, the next generation will have to pay back these loans. Unfortunately its just another layer of debt being raised in the EU.

The good thing with utilizing lending as the union in its entirety, is having much greater bargaining power. The loan will be guaranteed by the union's so the interest rate could be very competitive. This is going to be most beneficial for the economies that have the potential of growth but had more risk investing into, like for example the south. I can see why it was an issue some of the wealthier countries pressed hard against, even managing to reduce the amount. But still it sets a good precedent for less developed countries that the north had been neglecting.

[yhiaali3]

It's going to end up in local politicians pockets ... we the people will not get one cent ....

Well, my friend, you got the truth !! This is the reality even in Europe. Political corruption is dominant. Luxurious politicians will take everything and give crumbs only to the poor people !! This is what is happening here in my country and I think it is what is happening in Europe and in most of the countries of the world.
They steal billions under the pretext of helping the poor, but in the end we see not even a one cent, and then they take selfies with the poor in front of the cameras to show in front of the world that they are helping them, but in fact all this is propaganda only.