EU coronavirus bailout sparking bloc fury – ‘Naughty step’ states could trigger crisis

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The EU’s ambitious 750 billion euro recovery package to help those hardest hit by the coronavirus pandemic has divided member states. The design of the plan, mostly made of grants, has sparked fears among the so-called ‘frugal four’ (Austria, The Netherlands, Sweden and Denmark). However, as former Brexit Party MEP Jake Pugh told Brexit Watch, there may be a bigger problem on the horizon.

He said: “Because of the way it’s done through the budget, you’ve got net winners and losers.

“The two biggest recipients of the EU budget are Poland and Hungary.

“So not only have we got a deal with the Frugal Four, but you may also see some of those historical biggest net recipients now lose some of that.

“Which they are likely to do if more funds are going to Italy and Spain.”

Mr Pugh continued: “You then have the potential for more because, as you know, those two countries are on the EU ‘naughty step’.

“Also there is the context of the German Constitutional Court ruling.

“From an economic perspective, the implications are going be minimal.

“It doesn’t deal with eurozone problems, it creates other problems potentially with Poland and Hungary, and it’s all about kicking the can.”

The former Brexit Party MEP added: “Because it’s about to be the German presidency from July 1.

“Merkel doesn’t want to blow up, she just wants to get to the end of her period as Chancellor.

“They’re just pushing the problem down the road yet again.”

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Leaders of EU countries had a virtual meeting to find a compromise.

European Commission President Ursula von der Leyen described the discussions as “positive”.

However, there was reportedly no breakthrough.

According to the EU Commission President, many leaders agree that the “severity of this crisis justifies an ambitious common response”, and that an agreement is needed soon.

EU Council President Charles Michel added that they will try to “accelerate the negotiations to have an efficient meeting in July”.

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