EU chief calls for agreement on economic relaunch

[BRUSSELS] EU chief Charles Michel has called on European leaders to agree on a plan to relaunch the bloc's virus-ravaged economy, two days before a key summit in Brussels.

Europe has been thrust into its biggest recession in history and European Council head Michel is seeking the green light to launch a 750-billion-euro recovery fund to help governments weather the crisis.

"Now is the time. A deal is essential," he said on Wednesday in a letter to the 27 leaders of the EU member states.

"We will need to find workable solutions and come to an agreement, for the greater benefit of our citizens. Finding agreement will require hard work and political will on the part of all," he added.

This will be the first in-person summit since the pandemic engulfed Europe in March and leaders will also seek approval of the bloc's long-term budget.

Last week, Mr Michel unveiled his latest proposal for the 750-billion-euro fund in the hope of winning over the more frugal member states.

The fund would include 500 billion euros of direct grants to the hardest-hit countries, financed by joint borrowing backed by all EU members.

But countries including the Netherlands, Austria, Denmark and Sweden are resisting the plan, saying the money should be advanced as loans with tough conditions attached, such as deep economic reforms to cut debt.

As a sweetener for the so-called "Frugal Four", Mr Michel has proposed revising the EU's seven-year budget down to 1.074 trillion euros (S$1.67 trillion), 13 billion euros less than an earlier proposal.

Mr Michel also said last week that countries with long-held rebates on their European contributions would continue to get them, despite a big push to do away with these discounts.

The negotiations at the two-day EU summit promise to be lengthy and difficult. Some are expecting the talks to extend into a third day and perhaps a later summit.

AFP