Angela Merkel had a pointed warning for the countries favoring a more frugal approach to the EU’s coronavirus response: Don’t think you can slash the bloc’s economic recovery package.
Speaking at her retreat outside Berlin following talks with Italian Prime Minister Giuseppe Conte, the German chancellor said EU leaders meeting this Friday and Saturday in Brussels had “a long way to go” to agree on the proposed trillion-euro long-term budget and €750 billion recovery fund, and added that a second summit before the summer break might be required to clinch a deal.
However, in what appeared to be a direct message to the so-called frugal four — Austria, the Netherlands, Denmark and Sweden, who are critical about the proposed size of the fund and its mixture of grants and loans — Merkel made clear that while she could agree to small tweaks to the structure of the fund, she will oppose attempts to slash its size.
“It is important that what we now have as a recovery fund is massive, is something special and is not reduced to dwarf size,” she told reporters. “It is not possible to commit to every detail in advance, but it must be a special effort that makes it clear that Europe wants to stick together at this difficult time. There is a political dimension to this beyond the figures, and that is what the project must be measured against.”
Merkel added that both Germany and Italy agreed on the “basic structure” of the proposal that European Council President Charles Michel presented last week. She also endorsed the proposal linking payments to conditions on the rule of law and reforms, and said Conte had already “proactively shown ideas for Italy on how to get out of this difficult situation.”
Conte also sent a thinly veiled warning to the frugal four by saying that failing to agree on an ambitious recovery package would risk causing the “destruction of the single market,” which “even for financially stronger countries would lead to the destruction of value chains and … would be bad for all.”
He added that a swift agreement is also needed to avoid delays to Europe’s economic recovery.
The press conference by the two leaders displayed a new degree of harmony and unity between Germany and Italy that would have been hard to imagine a few months ago, especially in the field of financial and budgetary policies.
Not only did Merkel emphasize that Berlin and Rome “will join forces” in the budget talks, but she also lauded how Italians, among the most severely affected by the coronavirus crisis, mastered “these difficult weeks with admirable discipline and patience.”
“In Germany, there were an incredible number of videos that we watched when Italian citizens sang in the evening and at night and encouraged each other,” she said.
Conte returned the praise: “I always found that Angela is aware of the situation we are living in,” he said, expressing particular gratefulness for the 44 Italian coronavirus patients that German hospitals admitted at the height of the crisis.
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