MercoPress. South Atlantic News Agency

EU leaders unblock massive €1.8 trillion financial package for the recovery of the economy and linked to climate change

The €1.1 trillion Multiannual Financial Framework (MFF) and a historic recovery fund also paves the way for the bloc to agree on more ambitious cuts in greenhouse gas emissions

European Union leaders unblocked on Thursday a €1.8 trillion financial package to help the economy recover from the pandemic-induced recession after reaching a compromise with Poland and Hungary, the chairman of EU leaders Charles Michel said.

The deal on the €1.1 trillion Multiannual Financial Framework (MFF) and a historic recovery fund also paves the way for the 27-nation bloc to agree on more ambitious cuts in greenhouse gas emissions - by 55% by 2030 against 1990 levels, rather than by 40% as now.

The new climate goals will be discussed by leaders, but officials said there was broad support for the new targets and governments were only working out how to fairly spread the efforts across the EU.

“Deal on the MFF and Recovery Package. Now we can start with the implementation and build back our economies. Our landmark recovery package will drive forward our green & digital transitions,” Mr Michel said on Twitter.

EU leaders also discussed Covid-19 vaccines, relations with Washington, sanctions on Turkey for drilling in contested waters in the east Mediterranean Sea and extending sanctions on Russia.

But the focus was on getting all 27 behind a historic plan for joint EU borrowing of €750 billion to finance the recovery and the EU budget for 2021-2027 that focuses on digitalization and fighting climate change.

Poland and Hungary had blocked the financial package because access to the money is, for the first time, to be linked to respecting the rule of law. Since Warsaw and Budapest are under EU probes for undermining the independence of courts and media, they were at risk of losing billions from the EU.

But Germany, which holds the rotating presidency of the bloc until the end of the year, struck a deal with the two countries that allowed them to lift their veto.

Under the deal, EU leaders will issue a declaration, stating that the rule-of-law link to funds will be applied objectively and only to safeguard the proper use of EU money, rather than to punish countries under the separate EU rule-of-law probes.

To delay the practical application of the new regulation, Poland and Hungary can ask the EU's top court to check if it is in line with EU treaties, which could take even two years.