No agreement in sight as EU leaders meet for big money talks

BRUSSELS (AP) — With much discord still among European Union leaders, a video summit this week seems to have no hope of finding a compromise on a multibillion-euro post-coronavirus recovery plan or on the long-term EU budget.

Several EU officials and government leaders have shot down expectations ahead of Friday's meeting, warning that the remote discussions will mainly serve as a springboard for a future accord to be sealed, possibly in July, when leaders will be able to convene for in-person negotiations.

Friday will be the first time leaders will discuss the 750 billion-euro ($825 billion) coronavirus recovery fund proposed in May by the EU's executive arm to help countries weather the downturn triggered by the deadly virus. The aid plan, a blend of debt mutualization, grants and loans, is linked to another thorny issue which is far from being agreed — the EU's seven-year budget.

“You need this moment when you have collective discussions. Leaders need to feel what the others feel. That’s already a first step," a senior EU official said on Thursday. “We enter a phase of negotiations. We hope there is a momentum and that it will be appropriate for Europe to have an agreement before the summer break." The EU closes for business in August.

Backed by Germany and France, the recovery fund should be incorporated in the 2021-2027 EU budget under the commission's plans. Two-thirds of the fund — a half-trillion euros — would take the form of grants, while the rest would be made up of conditions-based loans for which countries could apply.

A group of four countries, however, the so-called “Frugal Four" consisting of the Netherlands, Denmark, Austria and Sweden, argue that grants should not be just handed over and that rescue funds should be paid back.

In a letter published by the Financial Times this week,...