EU leaders divide up 1.8 trillion euro bailout fund. What could go wrong?

The European Union, like so much of the world these days, seems constantly to be staring into the abyss. Its latest “crisis” summit – the umpteenth by my reckoning, but I may be underestimating the number – is charged with nothing less than the collection and allocation of around 1.75 trillion euros (£1.6 trillion), first to keep the show on the road for the next seven years and, and secondly to prop up those countries and economies worst hit by the coronavirus.

Leaders of the 27 turned up in Brussels on Friday for their first face to face summit since the Europe-wide Covid lockdown. Most swept into the lantern-shaped headquarters of the European Council wearing masks. Some did not.

There was little opportunity for friends and enemies to greet each other with their customary warmth. Instead, any one-on-one encounters had to be organised in conformity with social distancing rules that, as in the Council chamber itself, required leaders and their advisers to stay at least 1.5 metres apart.

All the talk was about money, which is what all EU summits are about even when they are about something else entirely.

In this context, it is not that long ago that €1.75 billion seemed like a large amount. Fans of the Austin Powers movies may recall the astonishment in the White House Situation Room when Dr Evil, who had been in stasis for 30 years, named his price for sparing the United States a nuclear attack: (cackling evilly): “one million dollars!”

These days, to keep up with the times, Evil would have to ask for a trillion dollars, reflecting a rate of monetary inflation which even Zimbabwe would be hard-pressed to match.

But the EU is not only riven by the amount of cash involved, it is also divided on who should pay in what and who should get out what. The old North-South divide has re-emerged with a vengeance, pitting the Teutons, Saxons and Scandinavians against the Latins, Slavs, Magyars and Greeks, the latter having had their hands in the former’s pockets for at least the last 20 years.

To add to the confusion, an East-West divide has also opened up, with the Poles, Hungarians, Czechs and Slovaks, in particular, pressing for an increased share of EU spending while insisting on their right to do as they please with whatever money is raised.

While the bickering goes on, the recovery fund, which has been agreed, re-agreed and agreed again, appears still to be a long way off.

Angela Merkel used to be a bit of a hawk when it came to fleecing Germany’s taxpayers. More recently, perhaps because she is due to retire next autumn, but also because she is painfully aware of the sheer enormity of the problems facing Europe, she has been more willing to open the national purse.

Not so the Netherlands, Austria, Sweden and Denmark, the so-called Frugal Four. Merkel met with Dutch premier Mark Rutte on Thursday – one day before the summit officially got underway – in a bid to align the North’s approach. But she seems to have made little headway. Rutte told journalists afterwards that he was not optimistic that the outstanding issues could be resolved.

Merkel responded by stating bluntly that she would oppose any attempt to cut the underlying budget or to alter the terms of the rescue package, agreed only last month at yet another crisis meeting.

“I must be clear,” she said. “What we want now for both the recovery fund and the next-generation EU programme is something out of the ordinary – something special – not a dwarf package. The task at hand is huge and the answer has to be equal to the task.”

No problems there, then. The only positive is that after four of the grimmest years in EU history, Brexit was not around to complicate proceedings. At least for the moment the seemingly never-ending crisis has been leeched from the system, rather as alcohol was at one point drained from Father Jack in the television comedy Father Ted, causing him  to awaken from his decades-long stupor to declare: “Am I still on this fekkin’ island?”

Well, the EU’s leaders are still on their Isle de l’Europe, still fighting the same old battles while trying to move forward into a new age of environmental enlightenment and post-Brexit brotherhood.

Typically, it was France’s Emmanuel Macron who summoned the necessary grandiloquence in contemplation of what lay ahead. “The coming hours will be absolutely decisive,” he said. “It is our Project Europe that is at stake.”

Europe’s leaders have, of course, been saying this for years. What usually happens – and it has happened twice in the last two months – is that in public, unless one country, usually Italy or Poland, but no longer the UK, finds itself out on a limb, everyone congratulates everyone else and offers a toast to “Europe”.

Later, in private, delegates will say what they really think, creating the atmosphere and necessary agenda for the next poisonous gathering. It is progress of a sort. Money is raised; money is paid out; crises are averted. The caravan slowly moves on. But it is not the stuff of legend. If the EU ever had a Finest Hour, other than on the day of its creation as the old EEC, it was probably when the British joined, and look how well that turned out.

The nitty-gritty of this weekend’s summit has little that is poetic about it. Merkel could yet prove the Rock against which others shatter, or at least retreat, bruised. The Chancellor wants a victory to take with her into retirement, and sorting out the EU budget and rescuing it from Covid gives her the opportunity she craves. Macron will back her, with the proviso that France comes well out of the deal.

Ranged against the Franco-German axis, the Frugal Four are opposed to the mix of grants and loans contained in the recovery package. They want loans only, and at reduced amounts, and with strings attached. Italy wants everything it can get its hands on, with grants to the fore. The Eastern Bloc’s Vizegrad Four, led by Hungary’s Viktor Orban, share Italy’s avarice but are against the strings – which, as advertised, would tie them to democratic norms, at least as understood in Brussels.

“Hungarians should decide how Hungary’s money is spent”, says Orban.

All in all, a cesspool of collective separation. Boris Johnson will most likely feel that he is well out of it. After all, what does he have to worry about?