The dispute had seen the three Baltic States threaten to block the approval of ta €750-billion EU package aimed at mitigating the effects of the coronavirus pandemic, unless money was forthcoming for the planned high speed rail link, which will run through the three Baltic States, with its northern terminal in Tallinn, cutting transport times between those countries and "continental" Europe.

A compromise was reached Thursday, however.

Pedro Nuno Santos, Portuguese Minister for Infrastructure and Housing (Portugual currently holds the rotating Council of the EU presidency and the prime ministers of all three Baltic States had addressed their concerns to their counterpart in that country, Antonio Costa, in a letter dated January 18 – ed.) said: "We are very happy with the provisional deal reached today, as it is fully in line with the European Council conclusions of July last year."

"Having reached a deal with the Parliament today allows the first calls under the Connecting Europe Facility to be launched before the Summer break. Thanks to this program, we have better transport connections and energy networks, as well as better digital services and connectivity in Europe. And this substantial funding must and will continue. It is especially important for overcoming COVID-19-related challenges and tackling climate change," Nuno Santos continued in an EU press release.

Rail Baltica, often referred to in Estonia as Rail Baltic, is primarily being funded by the Connecting Europe Facility (CEF) component of the EU budget, whose details were negotiated between the European Parliament and the Portugal, as president of the Council of the European Union, representing all 27 Member States.

U.S. political media site Politico got hold of the letter from then-Estonian prime minister Jüri Ratas, and his Latvian opposite number Krišjānis Kariņš, plus Lithuanian president Gitanas Nausėda, who jointly called for the €1.4 billion in Rail Baltica funding, even if that entails blocking the launch of the €750-billion recovery fund.

This followed a European Parliament move opposed to earmarking funds for either any particular project, or any specific countries or region.

The Baltic leaders' move mirrored earlier blocking tactics in Hungary and Poland, which saw a dispute over rule -of-law provisions late in 2020.

The Council of Europe says that now, a total of €33.71 billion will be allocated to key transport, digital and energy projects between 2021 and 2027 under the second period of the Connecting Europe Facility (CEF 2.0). Of this, €25.81 billion is allocated to transport projects, €5.84 billion to energy connections and €2.06 billion to the digital sector.

Thursday's agreement was also welcomed by Adina Valean, European Commissioner for Transport, also participating in the negotiations as a third party. 

"The latest 'trilogue' on CEF and the negotiators has reached an agreement," Valean said.

"I am very happy with the agreement, which opens up the use of more than €25 billion to finance the EU's transport infrastructure, which European citizens and businesses so desperately need," she went on, writing on her social media account.

Rail Baltica is set to start running in 2024 and work in Estonia is already underway, primarily so far focussing on major engineering issues such as underpinnings on boggy ground, intersections with other transport links and access rail for plant and material used in the process.

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