EU coronavirus fund debate enters third day after tense night

European union flag in front of building
European union flag in front of buildingPaulgrecaudDepositPhotosDeposit Photos

Negotiations about the form of an immense coronavirus recovery fund started up again on Sunday after the debate between European Union leaders grew tense the previous night. Reportedly standing in the way of a deal are the Frugal Four, Austria, Denmark, the Netherlands, and Sweden, which has also been supported by Finland.

The Frugal Four want a larger portion of the 750 billion euro fund to be comprised of a higher proportion of loans instead of grants, and have advocated for countries taking advantage of the fund to implement economic reforms. A report from broadcaster RTL Nieuws told of Dutch Prime Minister Mark Rutte standing firm on those issues, prompting French leader Emmanuel Macron to "frenziedly" leave talks with the group.

German Chancellor Angela Merkel also reportedly walked out, but re-entered talks on Sunday telling reporters, "There is a lot of goodwill, but there are also a lot of different positions." She said she was not sure if the leaders could reach a unanimous deal on Sunday.

"We are ready to compromise without giving up on ambition. Everyone must take their responsibilities," Macron said on social media. He stated that France and Germany were united in their support for an "unprecedented recovery plan".

For his part, Rutte said there was progress on the reform requirements, but that nothing has yet been finalized. Italian Prime Minister Giuseppe Conte seemed to disagree. He said he had a "very hard" disagreement with Rutte, which he described as a "clash."

By the end of Saturday's talks, some 450 billion euros was on the table as grants, instead of 500 billion at the start of the summit on Friday. EU President Charles Michel had also adopted parts of Rutte's proposal to allow for subsidies to be vetoed if a member state does not enact reforms.

Dubbed by some as an "emergency brake", it could freeze distribution of subsidy money until the 27 leaders of the European Union member states could discuss how the money would be spent. Conte called this mechanism "not very practical.