EU summit on COVID-19 package temporarily breaks after all-night talks

Weary and bleary European Union leaders temporarily broke up their summit at dawn on the fourth day of acrimonious haggling over an unprecedented 1.85 trillion-euro ($2.8 trillion Cdn) EU budget and coronavirus recovery fund to tackle the crisis. They committed to pick up the fight again later Monday.

In a two-day summit scheduled to have ended Saturday, deep ideological differences between 27 leaders forced the talks into Sunday and then through the night until the sun came up again over the EU capital. Grumpy, some leaders lashed out at each other when a common middle ground was still out of reach.

Dutch Prime Minister Mark Rutte, defending the cause of a group of five wealthy northern nations seeking to limit costs and strict reform guarantees, came under criticism from Italy and Hungary, whose Prime Minister Viktor Orban asked why the Dutchman had such "hate" toward him.

Rutte took it in stride.

"We are not here because we are going to be visitors at each other's birthday party later. We are here because we do business for our own country. We are all pros," he said.

The leaders were teetering on the brink of collapse though, Rutte said, before things somewhat turned around before dawn Monday.

"It looks more hopeful than when I thought during the night,'It's over,'" he said.

On Sunday night, after three days of fruitless talks, EU Council President Charles Michel implored leaders to overcome their fundamental divisions and agree on the budget and recovery fund.

"Are the 27 EU leaders capable of building European unity and trust or, because of a deep rift, will we present ourselves as a weak Europe, undermined by distrust," he asked the leaders at the end of another day of divisive negotiations. The text of the behind-closed-doors speech was obtained by The Associated Press.

Still haggling early Monday

"I wish that we succeed in getting a deal and that the European media can headline tomorrow that the EU succeeded in a mission impossible," Michel said.

But early on the fourth day of talks, the leaders still had not reached a compromise. As dawn broke Monday, they were still haggling over the size and terms of the recovery fund. Debate centredon whether needy nations should get between 375 billion eurosand390 billion euros in grants, officials said.

Even with German Chancellor Angela Merkel and French President Emmanuel Macron negotiating as the closest of partners, the traditionally powerful Franco-German alliance could not get the bloc's 27 quarrelling nations in line.

At their dinner table Sunday night, the leaders could mull a proposal from the five wealthy northern nations the Netherlands, Austria, Finland, Sweden and Denmark that suggested a coronavirus recovery fund with 350 million euros of grants and the same amount again in loans. The five EU nations nicknamed "the frugals" had long opposed any grants at all.

"We are ready to take the leap from loans to subsidies. If there are reforms, they need to be strictly defined. And, two, they need to be able to be enforced," Rutte said.

The pandemic has sent the EU into a tailspin, killing around 135,000 of its citizens and plunging its economy into an estimated contraction of 8.3 per centthis year.

The bloc's executive has proposed a 750 billion-euro coronavirus fund, partly based on common borrowing, to be sent as loans and grants to the countries hit hardest by the pandemic. That comes on top of the seven-year, 1 trillion-euro EU budget that leaders have been haggling over for months even before the pandemic hit.

All nations agree they need to band together, but the five richer countries in the north, led by the Netherlands, want strict controls on spending, while struggling southern nations like Spain and Italy say those conditions should be kept to a minimum.

Rutte has long been known as a European bridge builder, but this weekend his tough negotiating stance was being blamed for holding up a deal. He and his allies have been pushing for labour market and pension reforms to be linked to EU handouts and a "brake" enabling EU nations to monitor and, if necessary, halt projects that are being paid for by the recovery fund.

"He can't ask us to do specific reforms," Italian Prime Minister Giuseppe Conte said.

Rutte also wants a link to be made between the handout of EU funds and the rule of law a connection aimed at Poland and Hungary, countries with right-wing populist governments that many in the EU think are sliding away from democratic rule.

That drew Orban into anger.

"I don't know what is the personal reason for the Dutch prime minister to hate me or Hungary, but he's attacking so harshly and making very clear that because Hungary, in his opinion, does not respect the rule of law, (it) must be punished financially," Orban said.