Christine Lagarde, the President of the European Central Bank (ECB), warned European leaders on Friday that there may be risks to the financial markets if aid packages fail for economic recovery. The current calm stock market sentiment may turn around if no agreement is reached, according to officials, according to Lagarde, during a video conference.
The 27 EU leaders are currently meeting for the first time since the coronavirus outbreak on the billions they want to put into the union and economic recovery over the next seven years. Previous proposals for the multi-annual budget from 2021 to 2027, the so-called Multiannual Financial Framework (MFF), have been overtaken by the corona crisis and revised by the European Commission. It plans to link a € 750 billion recovery fund for the worst-affected Member States to the MFF. Moreover, this must be increased to EUR 1100 billion, from now (the years 2014 – 2020) to just under EUR 1000 billion. So there is a total of € 1870 billion on the leaders’ board.
France and Germany would insist that the deal be completed next month. The video conference will start at 10:00 am but is not expected to last forever. The time is not ripe for an agreement and leaders are expected to negotiate at least once or twice more in July, if possible physically in Brussels. According to EU sources, this is now mainly an orientation debate, so that EU President Charles Michel can prepare a ‘negotiating box’.