Prime Minister cautiously optimistic over EU recovery fund talks breakthrough but another long meeting beckons

Robert Abela is cautiously optimistic that EU leaders will reach some form of compromise on the COVID-19 recovery fund but not before the early hours of Tuesday.

The Prime Minister reported progress on the proposal put forward by Council President Charles Michel in the early hours of Monday but a resumption of the summit at 4pm has been postponed by an hour.

Speaking to MaltaToday from Brussels just before entering the council building, Abela said talks have continued in smaller groups throughout Monday.

“It is important that we leave Brussels with a compromise because if not it could send the wrong message,” he said.

The leaders also have to agree on the EU’s seven-year budget.

Abela said his first interest was to ensure Malta got its fair share of the deal but it was also important to ensure the single market as a whole got revived.

“It is equally important that the recovery package helps other countries to recover because these have a direct impact on our economy as well,” Abela said, pointing to Italy, which is a prime source market for tourism and trade.

After four days of non-stop talks, EU leaders meeting in Brussels have so far failed to agree on a recovery fund to help European economies battered by the pandemic.

The stand-off over a planned €750 billion recovery package is between four frugal States led by the Netherlands and supporters of more generous aid package led by France, Germany, Spain and Italy.

In the original proposal €400 billion were earmarked as non-repayable grants. The Netherlands and its allies want this amount to be less and instead have more funds directed as loans.

Another bone of contention between the frugals and the Visegrad countries led by Hungary, includes proposals to tie the disbursement of funds with adherence to rule of law. Hungary is insisting that mechanisms targeting rule of law already exist and there is no need to introduce new systems.

Asked whether Malta faced problems in this regard, Abela said this was not an issue.

“I had no difficulty in accepting adherence to the rule of law as a conditionality for fund disbursement but this was possible because of the changes my government has implemented since January,” he said.