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EU leaders agree not ready to sign off a recovery plan

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EU leaders agreed today (19 June) that urgent action was needed to haul their coronavirus-hit economies from the deepest recession since World War Two, but made no progress on a massive stimulus plan that has divided them bitterly for weeks, write Francesco Guarascio  and Philip Blenkinsop.

The 27 avoided a bruising bust-up during a summit by video-conference of around four hours, and agreed to meet in person in mid-July to haggle and get across the line a long-term budget and economic rescue package worth €1.85 trillion.

“Leaders unanimously agreed that the severity of this crisis justifies an ambitious common response,” European Commission President Ursula von der Leyen.

Earlier, European Central Bank chief Christine Lagarde warned the leaders that the European Union’s economy was in a “dramatic fall” due to the coronavirus crisis and that the full impact on unemployment rates was yet to come.

Under discussion is the EU’s 2021-27 budget of about €1.1trn, and a proposal by the Commission, the bloc’s executive, to borrow €750 billion from the market for a new recovery fund that would help revive economies hardest hit by coronavirus, notably Italy and Spain.

With more than 100,000 deaths from COVID-19, the EU is keen to demonstrate solidarity after months of bickering that has dented public confidence and put the bloc’s global standing at risk after its buffeting from Brexit.

A 'not particularly useful' summit

Spanish Prime Minister Pedro Sanchez voiced impatience with a negotiation process that officials say could drag into August, calling for an early agreement.

“The more time we waste, the deeper will be the recession,” he said on Twitter.

But Swedish Prime Minister Stefan Lofven said member states remained “fairly far from each other” and while everyone wanted to do a deal over the summer he was not sure it was possible.

Fiscally conservative northern countries of the EU and a high-debt “Club Med” group of southerners are divided over the size and terms of the recovery fund, which the Commission has suggested be split into two-thirds grants and one-third loans.

The Netherlands, Denmark, Sweden and Austria - the 'Frugal Four' - say the fund is too large and should be used only as loans, since grants would have to be repaid by all EU taxpayers.

They want the funds to be clearly linked to pandemic recovery and say recipients must commit to economic reform.

Austrian Chancellor Sebastian Kurz called for a clear time limit on the recovery fund so it does not become an “an entry into a permanent debt union”.

Eastern EU countries say too much money will go to the south and want spending to focus on agriculture and closing development gaps with the richer west. The latter group, in turn, are determined to keep their rebates on contributions to the bloc’s joint coffers, which others want to phase out.

One senior EU diplomat said while there was little to show for the summit, at least it was cordial.

“It was not particularly useful,” the diplomat said. “On the other hand, it was not very controversial either, and the tone of the debate was OK.”

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Scotland extends hospitality restrictions until 2 November - PA Media

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Coronavirus restrictions in Scotland, which include the closure of pubs and restaurants in the central belt area and a curfew on indoor hospitality elsewhere, are to be extended until 2 November, PA Media reported on Wednesday (21 October), citing Scottish First Minister Nicola Sturgeon, write Sarah Young and Andy Bruce.

 

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Coronavirus risks running out of control in Germany, warns Soeder

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The leader of Bavaria’s Christian Social Union (CSU), Markus Soeder (pictured), warned on Wednesday (21 October) that the coronavirus is at risk of spiraling out of control in Germany, writes Paul Carrel.

While Germany’s infection rates are lower than in much of Europe, they have been accelerating and hit a daily record of 7,830 on Saturday, according to the Robert Koch Institute.

“Corona is back with full force ... the second wave is here,” Soeder told the Bavarian state assembly, adding caution and prudence were required.

On Tuesday, residents in the Bavarian district of Berchtesgadener Land went back into lockdown, the first area in Germany to do so since April.

Soeder said he nonetheless wanted to keep open borders with neighbouring countries. Bavaria borders Switzerland, Austria and the Czech Republic. He was also determined to keep the economy functioning and schools and nurseries open as long as possible.

“Our priority is to avoid a blanket lockdown,” he told the Bavarian state assembly, adding that he would introduce a “dark red” alert level with tougher restrictions for areas in Bavaria that have 100 new cases per 100,000 people over seven days.

Earlier, a spokeswoman for German President Frank-Walter Steinmeier said he was staying in quarantine at home until Oct. 29 after a bodyguard tested positive for the virus.

Steinmeier, whose role is largely ceremonial, has now twice tested negative for the virus, the spokeswoman added.

“There is light on the horizon,” said Soeder. “Of course, the vaccine will come, of course the situation will be very different in spring next year ... There is a tomorrow after corona.”

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Commission approves €2.3 million Czech scheme to support health SPA facilities affected by coronavirus outbreak in the Karlovy Vary Region of Czechia

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The European Commission has approved a CZK 62 million (approximately €2.3m) Czech scheme to support providers of SPA medical procedures and curative rehabilitation treatments in the Karlovy Vary Region (Czechia) in the context of the coronavirus outbreak. The measure was approved under the state aid Temporary Framework. The public support will take the form of direct grants. The scheme aims at mitigating the liquidity shortages that health SPAs in the region are currently facing due to the drop in the number of patients caused by the coronavirus outbreak.

This scheme complements a scheme to support health SPA facilities in the whole of Czechia that the Commission approved in August 2020  (SA.58018). The Commission found that the Czech scheme for the health SPA facilities in the Karlovy Vary Region is in line with the conditions set out in the Temporary Framework. In particular, the support (i) will not exceed €800,000 per company as provided by the Temporary Framework; and (ii) will be granted no later than 30 June 2021.

The Commission concluded that the scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions of the Temporary Framework. On this basis, the Commission approved the measure under EU state aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here.

The non-confidential version of the decision will be made available under the case number SA.58198 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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