Reuters
The European Union’s top leaders remain deadlocked over the size and scope of a proposed rescue deal for the bloc as it responds to the COVID-19 downturn.
A summit of European unity to talk about a joint stimulus fund took a stand over the weekend, but the talks continued and continued on Monday.
The initial proposal included a combination of 500 billion euros in grants and 250 billion euros to distribute in the form of loans, the EU said at the time of its launch in May.
The proposal was almost immediately shot down as the Netherlands, Austria, Sweden, and Denmark reportedly expressed concerns over the €500 billion amount of grants, preferring a larger proportion of loans as part of the package.
Over the weekend, the group, known as the “Four Frugals”, advised paying up to 375 billion euros in subsidies, while countries such as Spain, which is one of the highs affected by the virus, argue that subsidies should be at least 400 billion euros, the BBC reported.
Belgian Charles Michel, President of the European Council, has proposed a subsidy commitment of 390 billion euros, the Financial Times reported. Leaders will talk about the proposal later Monday, the paper added.
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However, Rabobank analysts say the amount is “off-scale” with what is spent elsewhere.
“As in Europe, a team, a dream, becomes a stalemate every time the joint debt factor or tax transfers between the countries of the bloc arises,” said Jeffrey Halley, senior market analyst at OANDA.
Germany and France would have abandoned the negotiations earlier, a sign that things were going well.
The progress of EU leaders helped the euro succeed in up to four months, with the currency earning 0.3% against the dollar for the industry at $1.15 on Monday.
Discussions are expected to begin later Monday afternoon.
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