After almost five days of tough negotiations, European Union leaders have reached a deal on a “historic” rescue package. The 750-billion-euro financial package is the largest in the bloc’s history. 

EU heads of state agree to coronavirus rescue package

In a bid to protect European economies from the long-term consequences of the coronavirus pandemic, the 27 EU member states have agreed to an unprecedented budget and coronavirus rescue package. A compromise was reached on Tuesday morning, after more than four days of negotiations at a special summit in Brussels. 

Altogether, the package is worth some 1,8 trillion euros - 1.074 billion euros for the bloc’s broader seven-year budget and 750 billion euros for an investment programme. The package is designed to fight the economic fallout of the coronavirus crisis and keep the EU internal market together. At the same time, investments are to be put into making Europe’s economies more digital and climate-friendly. 

Bailouts for hardest-hit countries

For the first time ever, debts will be raised on a large scale on behalf of the EU and redistributed to member states that have been hardest hit by the pandemic. 390 billion euros will be given in the form of grants - a lower figure than the 500 billion euros originally proposed by France and Germany - and a further 360 billion euros in loans.

These payouts proved a particular sticking point in negotiations, with the so-called “Frugal Four” - the Netherlands, Austria, Denmark and Sweden - mounting especially fierce opposition. Claiming that the rescue package was unnecessary, the “frugals” voiced concerns about sending money to southern countries that they deem to be too lax with public spending. 

A compromise was therefore reached, whereby the payouts will come with important strings attached, while the frugals will be offered rebates on their EU contributions. Countries that receive stimulus payments will have their spending closely controlled and directed especially towards economic and environmental reforms. 

“Europe is a force for action”

EU Council President and summit leader Charles Michel, who tweeted “Deal!” just after 5.30 am on Tuesday morning, said that the agreement “shows our belief in our common future.”

“This agreement sends a concrete signal that Europe is a force for action,” Michel said at a press conference on Tuesday morning. “It is about a lot more than money. It is about workers and families, their jobs, their health and their well-being. I believe this agreement will be seen as a pivotal moment in Europe’s journey, but it will also launch us into the future.” 

Dutch Prime Minister, Mark Rutte, becoming known in the press as “Mr No” for refusing to change his standpoint on the package, is satisfied with the final agreement. He called the fund a “'good thing”: “We have always said that we show solidarity with the countries that have been hit hardest. But that solidarity has two sides. We believe that we can ask them to implement reforms so that they are better prepared for the next crisis. ”

This article originally appeared on IamExpat in Germany.