Anger flared and emotions ran high Sunday after EU leaders struggled through a third day of negotiations over plans for a landmark €1.82 trillion budget-and-recovery package.
In one of the more electric moments, French President Emmanuel Macron lashed out at Austrian Chancellor Sebastian Kurz, who had walked out of the leaders' gathering to take a phone call.
“You see? He doesn’t care. He doesn’t listen to others, has a bad attitude," Macron said, deriding Kurz, who is part of a self-described frugal faction that has pushed to shrink the overall size of the budget plan and reduce the amount of grants to be given to countries to help them recover from the coronavirus crisis. "He handles his press and basta!" Macron said.
As the clock struck midnight, the summit entered its fourth day, making it one of the longest in the bloc's history. But leaders were still deadlocked on the core question of the size of a proposed economic recovery fund.
They continued talking in small groups through the night and appeared to be closing in on a compromise. At around 5:30 a.m., European Council President Charles Michel gathered the leaders briefly and told them he would propose that the recovery fund pay out €390 billion in grants.
There was no immediate word, however, on whether everyone would sign up to that number and other details remained to be resolved. The leaders are due to reconvene at 4 p.m. Monday to try to work through the remaining sticking points.
The planned amount of grants, to be financed by an unprecedented level of joint debt, would be markedly less than the €500 billion proposed by France and Germany and by the European Commission. But an agreement to create the program at all was a concession by countries like the Netherlands that had entered the talks opposed entirely to taking on debt to issue grants.
France's President Emmanuel Macron arrives at the European Council building in Brussels on July 19, 2020
Leaders also jousted over an array of other issues, especially the system governing how recovery money would be disbursed, and the possibility of a provision that would allow the European Council, by qualified majority vote, to block the flow of EU funds to any country found not to be upholding the rule of law.
Following a relatively early and unceremonial dinner on Sunday evening, leaders intensified their discussion and at times emotions seemed to spill over. At that point, the summit had already gone on a day longer than planned.
Michel, who presided over the three days of excruciating negotiations, on Sunday evening delivered a speech in which he cited the number of coronavirus fatalities, and implored leaders to reach a deal that would send a positive message to European citizens and the world.
“The question is therefore the following: Are the 27 leaders responsible to the peoples of Europe capable of building European unity and trust,” Michel asked. “Or, through a tear, will we present the face of a weak Europe, undermined by mistrust?”
“Throughout the negotiations, I listened to everyone, showed the utmost respect,” Michel continued. “My wish is that we will reach an agreement and that European newspapers will headline tomorrow on the fact that the EU has achieved an impossible mission. This is what I have in my heart.”
But as anxiety that talks might collapse spiked at various points, there were some unexpected external interventions, including by European Central Bank President Christine Lagarde, who appeared to be telling the leaders not to worry about the possibility of an adverse reaction in the financial markets if they did not reach a deal by Monday morning.
Although she was not present at the talks, Lagarde weighed in by telling Reuters that it would be better for leaders to deliberate longer and reach an "ambitious" result along the lines of the European Commission's €750 billion recovery fund plan, including €500 billion in grants, than to seal a quick agreement.
Lagarde's surprise statement came after some national delegations complained of pressure and fear-mongering around the possibility of turmoil in the markets.
The European Commission also intervened, with infographics circulating among the national delegations that showed the benefits of being part of the EU's single market far outweighing the budget contributions of individual countries — especially countries that pay more into the budget than they get back.
The data appeared to be a reminder to the so-called Frugal Four — Austria, Denmark, the Netherlands and Sweden — which had been pushing hard both to shrink the overall size of the package as well as to increase the rebates that are used to cap their annual budget contributions.
"One graphic is worth one thousand negotiating hours," Elisa Ferreira, the European commissioner for cohesion and reforms, declared pointedly in a tweet that included four charts.
At one point, Macron leveled what might be the harshest insult possible in the post-Brexit European Council, likening Rutte and the Frugals to obstructionist Britain.
By far the fiercest point of contention was the size of the recovery fund and the mix of grants and loans. Macron and German Chancellor Angela Merkel had first put forward their proposal for €500 billion in grants, financed by joint debt, back in May.
And throughout Saturday and Sunday, Macron had aggressively pushed back against efforts by the frugal leaders to reduce the size of the grants program, putting him in direct conflict with Kurz and Dutch Prime Minister Mark Rutte, who were similarly adamant in their positions.
That led to Macron's explosive intervention late Sunday.
At one point, Macron leveled what might be the harshest insult possible in the post-Brexit European Council, likening Rutte and the Frugals to obstructionist Britain. “You are taking the seat of the U.K. around the table!” he thundered.
"You might take me for a nutcase with my grants, OK, but even Angela is with me,” Macron said at another point, drawing laughter from some, including Merkel herself, according to officials.
Dutch officials, meanwhile, expressed their own exasperation with Italian Prime Minister Giuseppe Conte for digging in his heels on the question of a governance mechanism to determine how recovery money would be disbursed.
Lili Bayer, Maïa de La Baume, Andrew Gray, Hans von der Burchard and Jacopo Barigazzi contributed reporting.
This article has been updated. It is part of POLITICO’s coverage of the EU budget, tracking the development of the seven-year Multiannual Financial Framework. For a complimentary trial, email pro@politico.eu mentioning Budget.
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