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Spanish PM sees 'very difficult hours ahead' as EU summit nears

Spanish Prime Minister Pedro Sanchez and Sweden's Prime Minister Stefan Lofven walk during their meeting, amid the spread of the coronavirus disease (COVID-19), in Harpsund, Sweden July 15, 2020. Erik Simander/TT News Agency/via REUTERS

STOCKHOLM (Reuters) - Spanish Prime Minister Pedro Sanchez said he saw “very difficult hours ahead” as he visited his Swedish counterpart Stefan Lofven for talks ahead of an EU summit to agree stimulus measures to boost pandemic-hit European economies.

EU leaders are due to meet later this week to haggle over the stimulus plans, but their first face-to-face summit since the lockdowns began in March is expected to be fraught with division.

Sweden, one of the bloc’s “Frugal Four”, wants a proposed recovery fund to distribute loans rather than grants, while also seeking a smaller long-term EU budget, positions that have pitted it against countries such as Spain.

“We have different views on the answer to the crisis, but we share a common goal,” Sanchez told a news conference at the Swedish government’s countryside residence Harpsund. “If we delay the response we delay the recovery and the crisis could get worse. We all have to make some sacrifices to reach an agreement.”

Leaders of the bloc have held a flurry of one-on-one meetings to persuade thrifty Sweden, the Netherlands, Austria and Denmark to drop their opposition to the 750 billion euro (680.18 billion pounds) recovery fund proposal.

Asked about prospects for an agreement in July, Lofven said: “It is complicated, we need to acknowledge it is complex and will be tough, but it is not impossible”.

“You need to be prepared to change and that needs to be from both directions. But at the same time all countries have their limits. So we have to find a bridge,” he said.

Under the Commission proposal, which is backed by Germany and France as well as southern countries such as Spain and Italy that are seeking funds to rebuild their hard-hit economies, two-thirds of the recovery fund would be in the form of grants.

Reporting by Niklas Pollard and Anna Ringstrom in Stockholm and Nathan Allen, Inti Landauro and Belen Carreno in Madrid; Editing by Alex Richardson