Solidarity or austerity? EU leaders have discussed the coronavirus scheme

Brussels  As they reap the worst recession since the Great Recession, the leaders of the European Union's 27 member states met at a video summit to discuss the future long-term budget of the alliance and the multi-billion euro post-coronavirus recovery plan. The goal is to pave the way for compromise later this summer.

Friday's council meeting is the first step in deep talks that culminate in a deal in July if member states resolve their differences. According to a number of EU officials and diplomats convened at this meeting, the goal of this virtual reunification is very limited and a good statement of goodwill already be successful.

The 750 billion-euro (25 825 billion) hedge fund proposed by the European Union's Executive Arm to assist member economies has unanimously welcomed the impact of the coronavirus.

The aid scheme is a mix of debt consolidation, grants, and loans. A group of countries - the Netherlands, Denmark, Austria, and Sweden - failed to get the approval of the Frazel Four. They oppose issuing a very simple loan to support difficult countries and argue that money should be given primarily in loans rather than grants.

Another dividing factor relates to how funds are allocated. The Commission proposes to work on criteria such as population size, GDP per capita, and unemployment. A top European diplomat said during the meeting that the range is very limited and should be pursued in view of the actual risk of coronaviruses.

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