Agreement reached on EU coronavirus recovery fund; Dutch PM satisfied

After some 90 hours of negotiations, spread over five days, the 27 leaders of the European Union member states reached an agreement on a recovery fund to help European economies with the consequences of the coronavirus pandemic. Prime Minister Mark Rutte is satisfied with the deal, speaking of a "comprehensive and good package in which the Dutch interests are well safeguarded" at a press conference held early this morning, NOS and NU.nl report.

The recovery fund consists of 750 billion euros in subsidies and loans. Part of the reason why the negotiations took so long was disagreement on how this should be divided. Germany and France initially wanted 500 billion euros to be subsidies, but the Netherlands, Denmark, Austria and Sweden - the so-called 'frugal four' - wanted more loans than subsidies. Now 390 billion euros of the amount will be subsidies, the other 360 billion euros loans.

Subsidized countries will have to meet certain conditions and implement reforms - one of the Netherlands' requirements. But less money will be available for research and development than the Netherlands would have liked.

Rutte was often criticized during the months long negotiations for the recovery fund, being accused of showing little solidarity and empathy for countries hit hard by the pandemic. The Dutch Prime Minister always stressed that companies like Spain, Italy and Portugal must first pledge to reform their economies before getting subsidies, so that they can learn to weather future crises themselves. The agreement now stipulates that countries can be held constantly accountable on reform agreements before they receive money. "In the most extreme cases, that could mean pulling the emergency brake if those countries have not done enough," Rutte said.

According to Rutte, it is very important that the reforms are "nailed down", both for Europe and for the Netherlands. "That makes for strong member states and a strong internal market."

European Council president Charles Michel is also satisfied with the deal. "It is a good deal, it is a strong deal, and most importantly, it is the right deal for Europe right now," he said at the press conference.

The recovery fund is linked to the European Union's multi-annual budget, which will now amount to 1,074 billion euros. Agreements were also made on this budget. The Netherlands will get a higher discount on the annual EU contribution, now a discount of 1.92 billion euros, and can have a say in the use of the subsidies from the recovery fund.