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

Member states' positions on balance between grants and loans under coronavirus recovery fund is starting to converge, as three-day EU summit continues

The special EU summit on the seven-year budget and COVID-19 recovery fund entered its third day on Sunday
The special EU summit on the seven-year budget and COVID-19 recovery fund entered its third day on Sunday

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.

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.

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