Special European Council, 17-21 July 2020

Summary:

EU National leaders were summoned for a special European Council summit on 17-18 July 2020, to hold political discussions on the Recovery Plan for Europe, which includes proposal for the Multiannual Financial Framework (MFF) 2021-2027 and the recovery fund also known as Next Generation EU. This was the first time the European Council convened face-to-face after the start of the COVID-19 (coronavirus) pandemic.

Further information:

Ahead of this summit - and following bilateral discussions with leaders - the President of the European Council put forward a revised proposal which identifies the six main matters at play for a potential agreement on the recovery plan:

• Size of the Multiannual Financial Framework;
• Rebates;
• Size of the Next Generation EU, the recovery instrument/fund;
• Balance between loans and grants;
• Allocation of the Recovery and Resilience Facility (RRF);
• Governance and conditionality.

Media outlets reported on tough negotiations between national leaders, primarily on the size and governance of the recovery fund, the balance between grants and loans, as well as rule of law as conditionality for access to funds. An overall agreement concerning the elements of the Recovery Plan (MFF + recovery instrument) was eventually reached in the early hours of 21 July 2020, translated in the adoption of a set of conclusions. The deal includes the Next Generation EU - €390bn in grants and €360bn in loans - which is attached to a revamped MFF for 2021-2027 amounting to €1.074 trillion.

This deal still required endorsement and ratification by the European Parliament. Its plenary session held a debate on the conclusions of this summit on 23 July.

(NB: for later developments, please check ESO's dedicated page on the overall MFF negotiations)

Official

European Parliament: Press Release, 10/07/2020: EU recovery and long-term budget: Leaders must do better https://www.europarl.europa.eu/news/en/press-room/20200709IPR83011/

European Council: Press Release, 15/07/2020: "A deal is essential. Now is the time" - Invitation letter by President Charles Michel to the members of the European Council ahead of their meeting on 17-18 July 2020 https://www.consilium.europa.eu/en/press/press-releases/2020/07/15/invitation-letter-by-president-charles-michel-to-the-members-of-the-european-council-ahead-of-their-meeting-on-17-18-july-2020/

Party of European Socialists: News, 16/07/2020: Socialists urge European Council to agree a strong, social and sustainable recovery deal https://www.pes.eu/en/news-events/news/detail/Socialists-urge-European-Council-to-agree-a-strong-social-and-sustainable-recovery-deal/

German Council Presidency: News, 17/07/2020: European Council to address EU finances https://www.eu2020.de/eu2020-en/aktuelles/article/european-council-mff/2369178

European Council conclusions, 17-21 July 2020 https://www.consilium.europa.eu/en/press/press-releases/2020/07/21/european-council-conclusions-17-21-july-2020/

European Council: Remarks by President Charles Michel after the Special European Council, 17-21 July 2020 https://www.consilium.europa.eu/en/press/press-releases/2020/07/21/remarks-by-president-charles-michel-after-the-special-european-council-17-21-july-2020/

European Commission: Press Release, 21/07/2020: Opening remarks by President von der Leyen at the joint press conference with President Michel following the Special European Council meeting of 17-21 July 2020 https://ec.europa.eu/commission/presscorner/detail/en/statement_20_1388

European Parliament: Press Release, 21/07/2020: EU summit compromise: positive step for recovery, inadequate in the long-term https://www.europarl.europa.eu/news/en/press-room/20200721IPR83702/

Politico, 21/07/2020: 5 takeaways from the EU budget and recovery deal https://www.politico.eu/article/5-takeaways-from-the-eu-budget-mff-and-recovery-deal-coronavirus/

Estonia: Estonian Government: News, 21/07/2020: Prime Minister Ratas: Estonia did unexpectedly well at the EU budget negotiations https://www.valitsus.ee/en/news/prime-minister-ratas-estonia-did-unexpectedly-well-eu-budget-negotiations

European Parliament: Legislative Observatory: Procedure File for Resolution on the conclusions of the extraordinary European Council meeting of 17-21 July 2020 https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2020/2732(RSP)

Renew Europe Group: News, 23/07/2020: Renew Europe hails recovery fund as an historic move, backs cross-party resolution calling for the opening of negotiations to improve the EU's 7-year budget https://reneweuropegroup.eu/en/news/1584-renew-europe-hails-recovery-fund-as-an-historic-move-backs-cross-party-resolution-calling-for-the-opening-of-negotiations-to-improve-the-eu-s-7-year-budget/

European Parliament: Press Release, 23/07/2020: EU long-term budget deal must be improved for Parliament to accept it https://www.europarl.europa.eu/news/en/press-room/20200722IPR83804/

European Council: Press Release, 23/07/2020: "This is historic. We renewed our marriage vows for 30 years. Europe is there, strong, standing tall" . Report by President Charles Michel at the European Parliament on the Special European Council of 17-21 July 2020 https://www.consilium.europa.eu/en/press/press-releases/2020/07/23/this-is-historic-we-renewed-our-marriage-vows-for-30-years-europe-is-there-strong-standing-tall-report-by-president-charles-michel-at-the-european-parliament-on-the-special-european-council-of-17-21-july-2020/

European Commission: Speech by President von der Leyen at the European Parliament Plenary on the conclusions of the Special European Council meeting of 17-21 July 2020 (23 July 2020) https://ec.europa.eu/commission/presscorner/detail/en/speech_20_1396

European Commission: News, 23/07/2020: Von der Leyen on European Council conclusions: NextGenerationEU is a signal of solidarity and willingness to reform https://ec.europa.eu/commission/presscorner/detail/en/ac_20_1406

---

News

EUObserver, 15/07/2020: Orban raises summit stakes with 'blackmail' conditions https://euobserver.com/political/148945

YLE News, 16/07/2020: PM Marin: "No deal" a possibility in EU's €750b package talks https://yle.fi/uutiset/osasto/news/pm_marin_no_deal_a_possibility_in_eus_750b_package_talks/11451875

France24, 17/07/2020: European leaders face tough negotiations on recovery deal https://www.france24.com/en/20200717-european-leaders-face-tough-negotiations-on-recovery-deal

BBC News, 17/07/2020: EU's 'moment of truth' as leaders seek Covid funding deal https://www.bbc.co.uk/news/world-europe-53429064

ECO News, 17/07/2020: PM wants ‘quick agreement’ at EU summit on ‘excellent’ budget proposal https://econews.pt/2020/07/17/pm-wants-quick-agreement-at-eu-summit-on-excellent-budget-proposal/

CityAM, 17/07/2020: Angela Merkel lowers hopes as talks start over €750bn EU Covid fund https://www.cityam.com/angela-merkel-lowers-hopes-as-talks-start-over-e750bn-eu-covid-fund/

Helsinki Times, 17/07/2020: Finland should not approve recovery fund as is, reiterates Grand Committee https://www.helsinkitimes.fi/finland/finland-news/politics/17876-finland-should-not-approve-recovery-fund-as-is-reiterates-grand-committee.html

TIME, 18/07/2020: E.U. Leaders Seek Compromise on Unprecedented $2.1 Trillion Budget and COVID-19 Recovery Fund https://time.com/5868578/eu-summit-budget-coronavirus-recovery-fund/

EurActiv, 18/07/2020: Leaders hit summit stalemate on EU recovery fund https://www.euractiv.com/section/future-eu/news/leaders-hit-summit-stalemate-on-eu-recovery-fund/

Politico, 19/07/2020: Angela Merkel: Possible that EU budget summit will fail https://www.politico.eu/article/merkel-possible-that-eu-budget-summit-will-fail/

Politico, 19/07/2020: EU leaders struggle into third day of budget and recovery talks https://www.politico.eu/article/eu-leaders-struggle-into-third-day-of-budget-and-recovery-talks/

Deutsche Welle, 20/07/2020: EU leaders struggle to break deadlock over coronavirus package https://p.dw.com/p/3fWFO

EurActiv, 20/07/2020: Leaders edge closer to deal as EU recovery fund talks enter fourth day https://www.euractiv.com/section/economy-jobs/news/leaders-edge-closer-to-deal-as-eu-recovery-fund-talks-enter-fourth-day/

El País, 20/07/2020: EU recovery fund conditions could hinder labor law changes in Spain https://english.elpais.com/economy_and_business/2020-07-20/eu-recovery-fund-conditions-could-hinder-labor-law-changes-in-spain.html

Dutchnews.nl, 20/07/2020: Coronavirus EU bailout came ‘close to failure’ but new compromise being drawn up https://www.dutchnews.nl/news/2020/07/coronavirus-eu-bailout-came-close-to-failure-says-rutte/

ERR News, 20/07/2020: Ratas: EU recovery fund agreement not yet reached https://news.err.ee/1114772/ratas-eu-recovery-fund-agreement-not-yet-reached

Copenhagen Post, 20/07/2020: Tense talks in EU summit on corona recovery budget http://cphpost.dk/?p=116558

RFI News, 20/07/2020: Macron threatens walkout as EU leaders disagree on Covid-19 bailout https://www.rfi.fr/en/europe/20200720-macron-threatens-walkout-as-eu-leaders-disagree-on-covid-19-bailout-750bn-euros-frugal-five-netherlands-finland

Politico, 21/07/2020: EU leaders agree on €1.82T budget and coronavirus recovery package https://www.politico.eu/article/eu-leaders-reach-deal-on-coronavirus-recovery-fund/

The Guardian, 21/07/2020: EU leaders seal deal on spending and €750bn Covid-19 recovery plans https://www.theguardian.com/world/2020/jul/20/macron-seeks-end-acrimony-eu-summit-enters-fourth-day

Euronews, 21/07/2020: European leaders agree €1.82 trillion COVID-19 recovery fund and budget after marathon summit https://www.euronews.com/2020/07/21/european-leaders-agree-1-82-trillion-covid-19-recovery-fund-and-budget-after-marathon-summ

Dutchnews.nl, 21/07/2020: EU secures Rutte’s approval for budget with corona conditions and extra rebate https://www.dutchnews.nl/news/2020/07/eu-secures-ruttes-approval-for-budget-with-corona-conditions-and-extra-rebate/

Reuters, 21/07/2020: EU delays strict rule-of-law conditions for recovery fund https://uk.reuters.com/article/idUKKCN24M11U

Balkan Insight, 21/07/2020: EU Summit’s ‘Historic’ Budget Pleases Central, South-East Europe Leaders https://balkaninsight.com/2020/07/21/eu-summits-historic-budget-pleases-central-south-east-europe-leaders/

EurActiv, 21/07/2020: Council brokers historic stimulus pact as budget cuts, rule of law retreat plague deal https://www.euractiv.com/section/politics/news/council-brokers-historic-stimulus-pact-as-budget-cuts-rule-of-law-retreat-plague-deal/

AP News, 23/07/2020: EU top official: Budget cuts are ‘difficult pill to swallow’ https://apnews.com/cae852fcdb1bded4d8740e785419871a

The Brussels Times, 23/07/2020: European Parliament threatens to block approved EU long-term budget https://www.brusselstimes.com/all-news/eu-affairs/123098/european-parliament-threatens-to-block-approved-eu-long-term-budget/

---

Commentary and Analysis

EPRS: Briefing, July 2020: Outlook for the Special European Council meeting of 17-18 July 2020 https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2020)654168

Politico, 15/07/2020: The coronavirus recovery plan that von der Leyen built https://www.politico.eu/article/ursula-von-der-leyen-coronavirus-recovery-plan-summit/

Politico, 16/07/2020: The EU’s budget fight — by the numbers https://www.politico.eu/article/the-eus-budget-fight-by-the-numbers/

BBC News, 16/07/2020: Coronavirus: Big choices for EU leaders on recovery billions https://www.bbc.co.uk/news/world-europe-53415783

Euronews: Views, 17/07/2020: Forget tying rule of law to the EU budget. It's better to add strings to EU funding later https://www.euronews.com/2020/07/17/forget-tying-rule-of-law-to-the-eu-budget-it-s-better-to-add-strings-to-eu-funding-later-v

Foreign Policy, 17/07/2020: Funding Unity in the EU https://foreignpolicy.com/2020/07/17/eu-budget-pandemic-recovery-fund-heal-divides/

Chatham House: Expert Comment, 17/07/2020: EU Budget Battle Could Undermine its International Ambitions https://www.chathamhouse.org/expert/comment/eu-budget-battle-could-undermine-its-international-ambitions

Euro|topics, July 2020: EU summit: is a deal at all possible? https://www.eurotopics.net/en/244347/

RTÉ News, 21/07/2020: 5 things to know about the EU virus recovery plan https://www.rte.ie/news/europe/2020/0721/1154567-eu-plan-five-points/

Euro|topics, July 2020: What to do with the money from Brussels? https://www.eurotopics.net/en/244518/

Euro|topics, July 2020: Brussels compromise: does the EU know what it wants? https://www.eurotopics.net/en/244351/

ECFR: Commentary, 23/07/2020: The proof of the European Council pudding will be in the eating https://www.ecfr.eu/article/commentary_the_proof_of_the_european_council_pudding_will_be_in_the_eating

Balkan Insight, 23/07/2020: European Rescues Itself https://balkaninsight.com/2020/07/23/europe-rescues-itself/

EPRS: Briefing, July 2020: Outcome of the Special European Council meeting of 17-21 July 2020 https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2020)654169

Euro|topics, July 2020: EU: a deal at the expense of the rule of law? https://www.eurotopics.net/en/244597/

Politico, 24/07/2020: Charles Michel, the budget deal and the art of the terrace tête-a-tête https://www.politico.eu/article/charles-michel-the-mff-budget-deal-and-the-art-of-the-terrace-tete-a-tete/

Foreign Policy, 30/07/2020: Europe’s Faustian Union https://foreignpolicy.com/2020/07/30/europes-faustian-union/

EurActiv, 30/07/2020: Bittersweet budget: what changes for CAP after EU summit deal https://www.euractiv.com/section/agriculture-food/news/bittersweet-budget-what-changes-for-cap-after-eu-summit-deal/

Balkan Insight, 30/07/2020: Europe Bails Out its Populists https://balkaninsight.com/2020/07/30/europe-bails-out-its-populists/

Democracy Reporting: Publications, 07/08/2020: Summit mythology: What did EU leaders decide on rule of law conditionality? https://democracy-reporting.org/dri_publications/summit-mythology-what-did-eu-leaders-decide-on-rule-of-law-conditionality/

---