EU budget talks drag on, but compromise on COVID recovery fund possibly within reach

EU member states' positions on which portions of the coronavirus recovery fund will be given in grants and loans is starting to converge.

Talks at a special European Summit in Brussels, where leaders have been trying to reach a consensus on a €1 trillion EU budget, entered their third day on Sunday.

The budget includes both the seven-year Multiannual Financial Framework as well as the coronavirus recovery fund.

While the European Commission's initial proposal was for the COVID-19 fund to be composed of €310 billion in grants, €250 billion in loans and €190 in grants to budget progammes, a possible compromise could see the amount of grants being reduced, Politico reported.

A senior official from a southern country confirmed with the portal that "most" of the €310 billion  in grants could be cut.

Talks in the margins of #euco with the #swedish socialist PM @stefanlofven on the #mff negotiations and the current stumbling blocks. We will remain seized in negotiations for a fair compromise for a strong #European recovery. Also discussed migration and rule of law matters - RA pic.twitter.com/kgazrnQOu1

— Robert Abela (@RobertAbela_MT) July 19, 2020

Despite a compromise possibly being on the cards, the summit is expected to go on late into the night, as leaders iron out the many details.

Earlier today, Prime Minister Robert Abela said it was also possible that no agreement would be reached by the end of the summit.

He said that a number of member states, including Poland and Hungary, remained opposed to a provision which would make the respect for the rule of law one of the conditions for access to the funds.

Abela said Malta would also be insisting that countries' unemployment rate not be used as a basis on which to determine the quantity of funds they received.

Malta, Abela said, should not be penalised for keeping unemployment low.