Fears grow EU leaders will come up short over €1.5trn recovery package for Covid-19 crisis

Fears are rising that EU leaders will flunk shirk the challenge at today’s summit meeting and defer a key decision on how to fund a €1.5 trillion Covid-19 recovery package that could determine the future economic and political stability of Europe.

Mairead McGuinness, Midlands-North-West MEP and vice-president of the European Parliament, said that “the eyes of the world were on the EU leaders”, and there were huge expectations resting on their shoulders of EU leaders to agree a huge recovery package to save European economies from a prolonged slump.

She said that the size of the recovery package would need to be “enormous” as political pressures builds on countries like Italy which have endured incredible levels of hardship and deaths from the pandemic.

“There is an expectation that the leaders will have to be united and come forward with a credible package to fund the recovery — and it will have to be huge because economies have been shut down,” Ms McGuinness told the Irish Examiner.

“There will also have to a recognition that the worst affected get the most support.

“I am thinking of Italy, which needs solidarity.”

She said that the other challenge facing EU leaders is that although in the past they couldn’t agree on EU budgets, they nonetheless needed to agree on Covid-19 funding “to ensure that no one can be left behind”.

“If it is only a piecemeal recovery, it will not meet anyone’s needs,” she said, citing the closure across Europe of the food services markets across Europe that has hit all food producers, including Irish firms.

“All eyes are on this summit, and we all know the difficulties faced by the EU finance ministers. The leaders know the spotlight is on them,” she said.

However, sources have said that the European Commission is not expecting to come through with its plan until at least April 29, and maybe longer.

“My hope is to make progress in June, July,” said an EU official, who is involved in preparing the leaders’ summit.

“Political lines are moving... but it will take time,” the official told Reuters.

Wealthy, fiscally conservative countries like Germany, Austria, Denmark, Sweden, Finland, and the Netherlands have all rejected calls by the EU’s ailing southern economies — led by Italy, France, and Spain — to sell joint so-called coronabonds in an effort to raise funds to restart growth.

Ben Tonra, professor of international relations at UCD, said it appears that EU leaders haven’t yet “grasped the nettle” to agree on ways to fund the recovery programme.

Mr Tonra said the EU leaders would have to send out some positive signals after the meeting to help the Italian leader Giuseppe Conte, who is facing enormous political pressures at home.

“He has got to return with the prospects with something. The French, Italians, and Spanish are looking for something big from the meeting and they are planning for something big,” Mr Tonra said.

“The stakes have never been higher. We are in the middle of this crisis which is having huge political and economic ramifications.

“If the union can’t step up to this in political and economic terms, I don’t think it collapses, but it would rob it of meaning and purpose.”