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EU leaders emerged from a marathon four-day and four-night summit on Tuesday to celebrate what they boasted was a historic rescue plan for economies left shattered by the coronavirus epidemic.
The 750-billion-euro ($858-billion) deal was sealed after intense negotiations that saw a threats of a French walkout and a Hungarian veto -- and fierce opposition from the Netherlands and Austria to what they said was too generous a package.
“These were of course, difficult negotiations in very difficult times for all Europeans,” said EU Council Chief Charles Michel, whose job was to guide the tortuous talks over more than 90 hours.
The package was made possible by the crucial backing of Germany and France and includes the biggest ever joint borrowing by the 27 members of the bloc, something that had been resisted by Berlin and the so-called “frugal” northern states for generations.
The deal is a special victory for French President Emmanuel Macron who came to office in 2017 committed to strengthen the European Union, but had struggled to deliver.
“This is a historic change for Europe,” Macron told reporters in a joint press conference with German Chancellor Angela Merkel, who said Europe had shown itself equal to “The greatest crisis in the history of the European Union.”
But there was criticism from some that the compromises made to get the deal were too great, with teenage climate campaigner Greta Thunberg tweeting her disappointment.
“As expected the #EUCO resulted in some nice words, some vague distant incomplete climate targets nearly impossible to track and a complete denial of the climate emergency,” she tweeted.
The package will send tens of billions of euros to countries hardest hit by the virus, most notably heavily indebted Spain and Italy.
Their call for solidarity was met with the fierce opposition of the “Frugals”, a group of northern nations led by Netherlands, who believed strongly that the stimulus package was unnecessary.
Spanish Prime Minister Pedro Sanchez hailed “a Marshall Plan for Europe”, that would boost Spain’s economy by 140 billion euros over the next six years.
But Dutch Prime Minister Mark Rutte denied the advent of joint borrowing for the rescue heralded the start of what he had warned of before the talks -- a “transfer union” with a permanent north-south transfer of wealth.
“This is a one off, there is a clear necessity for this given the excessive situation,” he told reporters.
The frugals were also deeply apprehensive of sending money to southern countries that they see as too lax with public spending.
To meet their concerns, payouts from the package will come with important strings attached -- a hard pill to swallow for Rome and Madrid who deeply resisted anything resembling the harsh bailouts imposed on Greece, Portugal or Ireland during the debt crisis.
The frugals were also enticed with heavy rebates on their EU contributions.
The recovery package will complement the unprecedented monetary stimulus at the European Central Bank, which has largely succeeded in reassuring the financial markets despite a catastrophic recession in Europe.
ECB chief Christine Lagarde welcomed the accord, saying it “shows that when most needed, the EU steps up and comes together to help the people of Europe”.
Overall, the deal will dole out 390 billion euros in the form of grants to pandemic-hit countries.
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