BRUSSELS: EU leaders wrangled over the size and rules of their huge post-coronavirus economic recovery plan on Saturday, seeking to overcome fierce resistance from the Netherlands and its “frugal” friends in a second day of intense debate.

European Council president Charles Michel proposed a fresh plan after his initial blueprint for a 750 billion euro ($850bn) package ran into stiff resistance from the richer northern member states.

“There’s a very tough battle in the offing,” a senior diplomatic source told AFP, predicting the marathon talks would take at least 12 more hours, stretching into early Sunday and could then still fail.

Dutch Prime Minister Mark Rutte has insisted member states retain final approval of EU funding — an effective veto — for national recovery plans for the likes of Spain and Italy, whose economies were ravaged by the virus and its lockdowns.

He says EU oversight is necessary to oblige countries to reform their labour markets to make them better able to cope with future crises.

In a concession to Rutte’s demands, Michel’s new plan includes a “super emergency brake” that gives any country a three-day window to trigger a review by all member states of another’s spending plans.

An official from a non-frugal state insisted that this does not amount to a right of veto, but admitted that it remains to be seen whether countries such as Spain and Italy will accept the compromise.

Meanwhile, a European source said the frugal countries were still not happy with the broader package and were seeking more cuts.

Published in Dawn, July 19th, 2020