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EU divided: Macron and Rutte set for fiery showdown over bloc's €750bn coronavirus bailout

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The French President will travel to the Netherlands for the crunch bilateral negotiations in the hope of brokering a compromise ahead of an EU summit next month. Mr Rutte’s fiscally conservative government have opposed the recovery fund, proposed by European Commission chief Ursula von der Leyen, which could see the EU raise debt in order to transfer cash to pandemic-stricken regions and industries. The proposed package consists of €500 billion in grants – a suggestion put forward by Mr Macron and German Chancellor Angela Merkel – and €250 billion in loans.

The debts would be repaid by EU member states using increases to national contributions to the bloc’s long-term budget.

Brussels has also pitched a series of new EU taxes that could help claw back the funds.

The Dutch leader has signalled he would much prefer the transfers to take the form of low-cost, repayable loans rather than the grants scheme put forward by Brussels.

The pair will meet in the Hague for a working dinner, according to Mr Macron’s office.

A source familiar with the meeting said Mr Macron and Mr Rutte will also discuss Air France-KLM, as the two governments tussle for influence over the Franco-Dutch airline group.

Before the EU’s recovery fund can be implemented, the bloc must secure unanimous approval from its member states.

The Netherlands has already raised concerns over whether a deal could be struck at a face-to-face summit next month, the EU’s first leadership level gathering since the coronavirus outbreak.

After a virtual summit of EU leaders, Mr Rutte last week said: “It is uncertain whether it would be finalised then or whether we will need more sessions, and whether they should be during the summer or later.”

The Netherlands is a member of the so-called “Frugal Four” – alongside Austria, Denmark and Sweden – who have pushed for the EU to limit its spending plans in the wake of Brexit.

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An Elysee official said: “It is essential not to lose the momentum that was created during the health crisis.”

European leaders will hold their first face-to-face summit since the coronavirus outbreak on July 17 and 18.

A second summit could even be held towards the end of the month if European Council President Charles Michel feels a deal is close.



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