No significant progress made during first day of Special European Council

Prime minister Jüri Ratas (Center).
Prime minister Jüri Ratas (Center). Source: Siim Lõvi /ERR

European Union heads of government are trying to reach an agreement on the long-term budget EU for 2021-2027, along with a one-off support measure totalling €750 billion to restart the EU economy. No significant progress was made in the first day of discussions.

This meeting of the European Council started with unusual greetings. The first such meeting after the wide-spread coronavirus means smaller delegations, constant disinfecting and distancing between the heads of government, ETV's daily affairs show "Aktuaalne kaamera" reported on Friday.

Estonian Prime Minister Jüri Ratas (Center) stood in front the council: "We must give the pandemic a concrete and rapid response and certainly restart the European economy. It is also important for us - Estonia and the other Baltic states - that support packages for agriculture would be more consistent with packages for other states so that we could equate them. Also connections with other European states, that being Rail Baltic."

On Friday, ERR News wrote that together with the latest grant of an additional €216 million in Connecting Europe Facility (CEF) financing and national co-financing, Rail Baltic has already secured around €1.2 billion from the European Union and national funds.

Agreement on joint loan to restart EU economy still not reached

Germany's Chancellor Angela Merkel said ahead of talks on the planned €750 billion stimulus package: "We are going into the consultations with a lot of vigour, but I must also say that the differences are still very, very large and I cannot therefore predict whether we will be able to reach an agreement this time."

The recovery plan must be confirmed via member state consensus, a legal certainty that the plan is in accordance with previous EU treaties, is also critical.

Along with unanimous support from EU member states, an agreement must be reached in the European Parliament. Member states hope for an agreement by the end of July.

Ratas told "Aktuaalne kaamera" on Friday that an agreement is still far. "It seems to me like many countries have a desire to reach an agreement, but all 27 EU states must have that desire."

The Netherlands has emerged as the most likely holdout, but their position is backed to varying degrees by fellow members of the so-called "Frugal Four" -- Sweden, Denmark and Austria.

They want any loans or grants to come with strict conditions attached to ensure that heavily-indebted countries like Spain and Italy carry out labour market reform.

This is furiously opposed by the south. Both Charles Michel (President of the European Commission - ed.) and Merkel, whose country has just taken on the rolling six-month presidency of the EU, will struggle to broker any compromise.

The Frugals oppose grants, and want any loans to come with conditions attached.

Ratas said on June 15 the the Estonian government is ready to support and participate in the one-off and time-limited support measure totalling €750 billion, which has been proposed by the European Commission to be shared by EU members. Of this, €500 billion is earmarked for grants and €250 billion for loans to countries. 

"According to the current calculations, Estonia's share in repaying the €750 billion loan of the European Union should be about €1 billion between 2028-2058. It totals about €35 million a year," Ratas said.

The government will not support additional sources of income to finance EU's budget and the recovery plan, and will prefer to finance it the way it is done now, through contributions based on the wealth of member states.

Estonia's stance is that a consensus must be reached in taxing issues. In addition, the debt burden of countries with below-average standards of living should not raise higher than of wealthier states.


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Editor: Kristjan Kallaste

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