EU leaders are poles apart on the terms of a €1.8tn (£1.6tn) budget and recovery package as they met for the first time in five months on 17.07.2020, with Angela Merkel warning of the possibility of tiresome and “not-to-led-anywhere” talks into a second destabilizing summer summit. Germany’s Chancellor Angela Merkel cautioned that EU leaders might fail to reach an agreement on Sunday on a huge post-virus recovery plan for the exhausted European economy.

“I still can’t say whether a solution will be found. There is a lot of good will… but it may also be that no result will be achieved today.” She exclaimed while calling the third day the “decisive” day of an extraordinary European summit, Merkel said the 27 leaders had “many positions” on the size of the fund, on rules for accessing it and on tying it to respect for the rule of law.

After Dutch Prime Minister Mark Rutte and his “Frugal Five” allies blocked a deal, Merkel was about to join French President Emmanuel Macron and the president of the European Council, summit host Charles Michel, to formulate a new proposal to break this deadlock.

Key takeaways
• Michel proposed 750-billion-euro package of EU loans granted to help member states recover from the recession caused by COVID-19.
• However, Austria sees the package as too big
• The Netherlands wants member states to be able to veto national spending plans.
• The rest of the 27 EU leaders were due to meet again in the full summit format from noon (1000 GMT)

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