EU's Michel rejigs recovery fund plan to break summit deadlock

European Council President Charles Michel makes a statement as he arrives for the first face-to-face EU summit since the coronavirus disease (COVID-19) outbreak, in Brussels, Belgium July 17, 2020. Francisco Seco/Pool via REUTERS

BRUSSELS (Reuters) - European Council President Charles Michel offered a revised plan for the EU’s proposed economic recovery fund on Saturday to break a deadlock between the bloc’s 27 leaders on the second day of a summit in Brussels, according to a document, diplomats and officials.

To assuage concerns by the northern camp of thrifty EU countries led by Dutch Prime Minister Mark Rutte, the share of free grants in the proposed 750 billion euro recovery fund would be reduced to 450 billion euros from 500 billion.

This, along with plans for an ‘emergency brake’ on disbursement of funds, would appease wealthy northern states who want conditions attached to grants and would prefer to see those countries worst affected by the coronavirus crisis take loans.

The proposal would also increase rebates on the core EU budget for Austria, Denmark and Sweden.

Reporting by Gabriela Baczynska; Writing by John Chalmers