The Daily Update - Germany Takes The Baton

As Germany takes up the presidency of the EU Council tomorrow Angela Merkel has stated that one of the main objectives during her presidency will be to implement the EUR750bn post-coronavirus recovery fund. However, Denmark, Sweden, Austria, and the Netherlands, known as the ‘frugal four’, have protested at the proposed fund, believing aid should instead come in the form of low-interest loans. They have said they would not agree to a mutualization of debt nor to an increase in the EU budget. The recovery fund would be embedded within the next long-term EU budget which begins in January 2021.

However, Merkel, ever the diplomat, held out the olive branch to the four countries, emphasising that EU countries not only needed to show willingness to reform their economies, but also to make them ‘future-proof’. She believed there is middle ground to find an agreement, although admitted there is still ‘a long way to go’. After meeting with French President Macron, she said that both were ‘very happy that we agree on the challenges that we want to overcome together’ adding that although expectations were high both Berlin and Paris were ready to rise to the challenge.

For his part, Macron believes the pandemic is not yet at its peak and thinks that decisive steps need to be taken to deal with the fall-out from the virus. ‘The chancellor and I put it on paper: It's our absolute priority. Without this, Europe wouldn't rise to the challenge’ Macron said, referring to the post-pandemic recovery plan, adding ‘We must defend our democracies’.

On the face of it, Germany’s presidency of the EU could be a tough one. Not only does Merkel have to worry about the ongoing pandemic and its fallout, there is also the small matter of the EU trading relationships with the US, China and looming Brexit to go with the ongoing challenges of climate change, immigration etc. However, as they say, timing is everything, and Germany taking the EU presidency amid these daunting challenges looks very good timing indeed.