European Union leaders reached a deal on a massive stimulus plan for their coronavirus-blighted economies at a pre-dawn meeting on Tuesday after a fractious summit that went through the night and into its fifth day.
The deal will see the EU issue 750 billion euros ($860bn) of joint debt to help member states mitigate the economic downturn.
The agreement required the unanimous approval of all 27 member states and represents a victory for German Chancellor Angela Merkel and French President Emmanuel Macron, who drafted an early outline for the proposal in May. The emergency fund will give out 390 billion euros ($446bn) of grants and 360 billion euros ($412bn) of low-interest loans.
Summit chairman Charles Michel tweeted “Deal” shortly after the bloc’s leaders reached agreement at a 5:15am (03:15 GMT) plenary session. Another official present at the summit said: “Conclusions adopted!”.
Italy, the original European epicentre of the pandemic, will likely be the biggest beneficiary from the plan. Italian Prime Minister Giuseppe Conte said his country expects to receive 28 percent of the 750 billion euro emergency fund ($860bn), comprising 81 billion euros ($93bn) in grants and 127 billion euros ($146bn) in loans.
French Finance Minister Bruno Le Maire said France would get 40 billion euros ($46bn) in subsidies as part of the EU package.
Officials said the deal, which came after Michel presented compromises on the recovery fund, is critical to dispel doubts about the bloc’s very future.
The EU was slow to coordinate its initial response to the COVID-19 pandemic and, already weakened by the United Kingdom’s departure from the bloc, a united front on economic aid was important in demonstrating that it can jointly step up to a crisis.
“It has been a long summit and a challenging summit, but the prize is worth negotiating for,” Irish Prime Minister Micheal Martin said as the Brussels summit approached the record length set at a 2000 meeting in the French city of Nice of almost five full days.
European nations have done a better job of containing the coronavirus than the United States after a devastating early few months that hit Italy and Spain particularly hard, collaborating on medical, travel and economic fronts.
The European Central Bank has pumped unparalleled amounts of money into economies to keep them going, while capitals hammer out their recovery funds.
Diplomats said the leaders appeared to put aside the rancour that stood in the way of a compromise after hours of haggling through the weekend.