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

EU leaders reached a landmark €1.82 trillion budget and 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.

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Speaking to reporters, European Council president Charles Michel called it a “good deal”, stating that “Europe is solid”.

European Commission President Ursula von der Leyen, meanwhile, underlined important concessions made in the search for a compromise, saying she regretted the cuts to “modern policies” in research and innovation.

French president Emmanuel Macron called it an “historic day for Europe”.

The recovery plan includes €390 billion worth of grants and €360 billion worth of loans due to a compromise with the so-called frugal four, now five, countries — Netherlands, Austria, Finland, Sweden and Denmark.

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The recovery fund had originally set €500 billion to be handed out as grants and €250 billion in loans, which was supported and pushed by a close Franco-German alliance.

On Monday, Merkel had reaffirmed her support for “substantial parts of grants” to be handed out to countries most severely-hit by the economic impact of the COVID-19 pandemic.

“That is the answer we need for an exceptional situation,” she said, adding: “exceptional situations also require exceptional efforts”.

Early Tuesday, Austrian Prime Minister Sebastian Kurz shared a photo of the “frugals”, stating that the final package was a “good result for the EU”.

Now the deal will have to pass the scrutiny of the European parliament, which will shortly convene a special plenary session.

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Making history

What had been planned as a two-day summit has become one of the longest in EU history.

Talks were originally planned to end on Saturday, but the effort to broker a compromise pushed leaders to extend their hotel stays.

It has been compared to the Nice summit in 2000, where arguments over treaty changes and enlargement stretched into four days.

The European Council press service tweeted that the 2000 summit in Nice “started at 09h45 am on Thu 7/12 for the ‘European Conference’ (#EU15 plus accession candidates + others) and lasted until 05h30 am on Monday 11/12.”

The latest summit falls just short of the Nice summit record.

Luxembourg Prime Minister Xavier Bettel said in his seven years experience of European meetings he “had never seen positions as diametrically opposed as this.”

“This is really a very, very difficult negotiation because it is not only about this one new set of big money, but it really changes the contours of monetary union,” Guntram Wolff, Director of the Bruegel economic think tank in Brussels, told Euronews.

“Its the first time the EU borrows money to give it as grants to countries. So it’s really a game-changer in terms of how this monetary union, how this European Union works.”

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