European markets close up despite EU talk trouble
European leaders fail to agree on €750bn post-coronavirus recovery fund
European markets closed up at the end of Friday trading, despite the failure of EU leaders to agree on a post-coronavirus recovery fund.
The pan-European Euro Stoxx 50 and 600 ended the day up 0.59 and 0.60 per cent, respectively. The German Dax and French Cac 40 both finished up 0.4 per cent, while the Dutch AEX gained 0.93 per cent.
Belgium’s BEL 20 was one of the poorly performing European indices of the day, closing down 1.09 per cent.
Talks between the leaders of the EU’s 27 member states would normally take place across town at the organisation’s Brussels headquarters, however, owing to the ongoing pandemic, discussions took place over video call.
Indeed, leaders struggled to agree on how best to bounce back from the Covid-19 crisis, with a €750bn (£676bn, $840bn) recovery fund proving divisive.
A number of the bloc’s members, such as Denmark, Sweden, Austria and the Netherlands voiced their concern that the fund was too large.
Under the current proposals, the nations worst-affected by the virus, Italy and Spain, would receive the largest support packages.
Although not against helping their southern allies, the more northern states voiced their opposition to the idea of simply issuing €500bn in EU grants. Instead the leaders of these nations called for loans which would eventually have to be repaid.
Attempting to mediate matters, the German chancellor Angela Merkel stated: "The bridges we still have to build are big, that's true, but it was a discussion in a very constructive atmosphere.”
The scale and ambition of the ‘Next Generation EU’ plan could only amplify existing tensions within the bloc.
Indeed, even the president of the European Commission, Ursula von der Leyen recognised this week that there are: "differences of opinion on various issues - for example, the overall size of Next Generation EU, on the balance between grants and loans".
This latest expansion of the EU’s budget coincides with the departure of one of its historically largest contributors, the United Kingdom. In light of this divergence, the German Finance Ministry this week anticipated a 42 per cent rise in the nation’s contribution to the EU budget.
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