EU can't pour debt on debt, says Micheál Martin

EU can't pour debt on debt, says Micheál Martin
Photo: PA 

Taoiseach Micheál Martin has expressed concern at the deadlock over the EU's Covid-19 aid package and attempts by some member states to dilute the level of grants.

Attending a third day of EU leader talks in Brussels, he told media that significant differences remain on the deal, which aims to release up to €750bn in funds to member states.

But some members want the size of the grants reduced and instead are demanding long term loans.

“I believe personally, and Ireland believes, that pouring more debt on debt, is not the way out of this and some member states find that very difficult. And so the grants element of this is very important. 

"One has to make an assessment that at some stage in this process that if the package is diluted too much, does it really represent significant response that the Chancellor Angela Merkel and French President [Emanuel] Macron originally envisaged with their €500bn package and then the commission with the €750bn.” 

The absence of an agreement would be very negative in terms of the perception of Europe's capacity collectively to respond to a crisis that is unique and is a 100-year event, Mr Martin said.

The EU proposal had moved to release the grants totalling €500 billion, with a further €250 billion in the form of loans.

One draft of the EU leaders text saw the grants level reduced to €450 billion. But the so-called the Frugal Four - the Netherlands, Sweden, Austria and Denmark - are reportedly seeking a further reduction of €155 billion for the grants.

Explaining the stand-off, Mr Martin added: “Significant differences still remain both in terms of the rule of law issue which took up a large proportion of the debate last evening at the plenary.

"Also the actual size of the package and the balance within the package between grants and loans. That's where significant disagreement still remains, notwithstanding movement yesterday and overnight in term of the balance and reduction in the grants.

“Collectively, Europe must recover from this. Ireland being an exporting country, depends a lot on the success of the [EU] single market, and needs that to happen as well. There are significant differences and remains to be seen whether we can get agreement today.”

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