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Stimulus Deal Reached For Pandemic-Stricken EU Economies

DAVID GREENE, HOST:

Well, after four days and nights of very tense negotiations, European Union leaders have reached an historic agreement on a pandemic recovery fund. It is worth more than $850 billion. And we should say this deal was hard won and not without drama and not without political theater.

NPR's Rob Schmitz is covering all of this from Berlin. Hi, Rob.

ROB SCHMITZ, BYLINE: Good morning, David.

GREENE: So I'm not being overdramatic here. I mean, this sounds like this got very tense. And...

SCHMITZ: (Laughter).

GREENE: ...A deal came through really early this morning.

SCHMITZ: Yeah. You know, picture the scene here. You've got 27 leaders in one room. It's early morning. They've been bickering all night. Each of them feels like they have to go home with a political win. So it's somewhat remarkable that this recovery package took just four days to secure unanimous agreement. The biggest sticking point was whether the money will be paid out in grants or loans. German Chancellor Angela Merkel and French President Emmanuel Macron originally proposed that a lion's share of the recovery package would be doled out as grants.

But the group of countries known as the frugal four - that would be the Netherlands, Austria, Denmark and Sweden - refused to agree with that. And in the end, nearly half the aid will be distributed as loans, and a little more than half will be grants. And all 27 leaders agreed they'd take on this historic debt together. After it was all said and done, a very relieved and exhausted European Commission President Charles Michel said the process shows the strength of the European Union.

(SOUNDBITE OF ARCHIVED RECORDING)

CHARLES MICHEL: We showed collective responsibility and solidarity. And we show, also, our belief in our common future.

GREENE: I love after four days of bickering, you can come out and just make it all sound like it came together easily.

SCHMITZ: (Laughter).

GREENE: I mean, it just doesn't sound like unity was a dominant theme here.

SCHMITZ: Yeah, that was kind of spin. And it was not. I mean, in many ways, the disunity of the European Union surfaced over and over during the summit with leaders sniping at each other. At one point, Emmanuel Macron reportedly slapped the negotiating table and yelled at Austrian Chancellor...

GREENE: Wow.

SCHMITZ: ...Sebastian Kurz over being too tight fisted. And Dutch Prime Minister Mark Rutte was nicknamed Mr. No by other leaders for his refusal to budge. Rutte also insisted that if countries like Hungary and Poland want financial aid, they should be made to adhere to EU standards for democracy and the rule of law. And that angered Hungary's prime minister, Viktor Orban. Here's what he said.

(SOUNDBITE OF ARCHIVED RECORDING)

PRIME MINISTER VIKTOR ORBAN: 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, must be punished financially. That's his position which is not acceptable.

SCHMITZ: But David, in order to get Hungary and Poland to vote for this budget and recovery package, EU leaders were forced to water down these rule-of-law conditions.

GREENE: It's just so amazing. You and I have covered these summits with leaders. Often, they're so staged and scripted. This sounds very much the opposite.

SCHMITZ: (Laughter).

GREENE: And they weren't just talking about this recovery package for the pandemic, right? I mean, they were also voting on a seven-year budget that's worth more than a trillion dollars.

SCHMITZ: Yeah, this was a big negotiation. I mean, this budget is a greener budget than we've seen before. It supports programs that belong to what is called the European Green Deal. It'll also spend more on the sorely needed digitization of Europe's economy. But when it goes to the European Parliament for ratification later this year, it is expected to face some challenges because it did not tackle concerns about how Poland and Hungary are violating rule-of-law standards. But in the end, it will likely pass because the EU is facing its biggest recession since the Great Depression, and it needs all the help it can get.

GREENE: NPR's Rob Schmitz covering some tense negotiations and a big deal in Europe. He's reporting from Berlin. Rob, thanks so much.

SCHMITZ: Thank you. Transcript provided by NPR, Copyright NPR.