Spain's Prime Minister Pedro Sanchez (L), French President Emmanuel Macron (C) and German Chancellor Angela Merkel (R) look into documents during an EU summit in Brussels on July 20, 2020, as the leaders of the European Union hold their first face-to-face summit over a post-virus economic rescue plan. (Photo by JOHN THYS / POOL / AFP) (Photo by JOHN THYS/POOL/AFP via Getty Images)
EU agrees on 'historic' economic recovery plan
02:33 - Source: CNNBusiness

Editor’s Note: David A. Andelman, executive director of The RedLines Project, is a contributor to CNN where his columns won the Deadline Club Award for Best Opinion Writing. Author of “A Shattered Peace: Versailles 1919 and the Price We Pay Today,” and the forthcoming “A Red Line in the Sand: Diplomacy, Strategy and a History of Wars That May Still Happen,” he was formerly a foreign correspondent for The New York Times and CBS News in Europe and Asia. Follow him on Twitter @DavidAndelman. The views expressed in this commentary are his own. View more opinion on CNN.

CNN  — 

It was the first time Europe’s leaders had seen each other face-to-face since the pandemic swept across the continent, shredding the European Union and causing untold pain and economic suffering, followed in most quarters by a recovery unlike anything experienced in the United States. With 27 different agendas, it was a model of how to deal with a critical issue of money.

Late on Monday, there was unanimity on the largest financial project ever attempted on the continent – a total recovery package of $858 billion. Many of the rifts, between rich and poor nations, those with true democracies and others verging on autocracies, were papered over.

David A. Andelman

But in the end, in a model that should be examined closely as Washington strives desperately to work toward similar compromises, this one worked. It was also the first concrete example that Europe could go it alone in crisis, for the first time without Britain and the nearly 10 billion euros it contributed each year, on average.

The first Covid-19 summit of the European Union kicked off on the birthdays of German Chancellor Angela Merkel and Portuguese Prime Minister Antonio Costa. Costa gave Merkel a German translation of “Blindness,” by the Nobel Prize-winning Portuguese author José Saramago, Le Monde reported – the story of a city where everyone was suddenly stricken with blindness, but for one woman who led the whole town out of its pandemic.

Costa suggested that Merkel was in a position to do the same by accepting a common European indebtedness – effectively one for all and all for one. With that, everyone was in a most convivial spirit – lots of elbow-bumped greetings and smiling eyes above the masks all around as the leaders sat down to debate.

But then everything went downhill fast. The idea of a common European debt, with no strings attached, was not what some countries had in mind.

True, every country, even those touched earliest and deepest by the depredations of the virus, had recovered – better and more quickly than the United States, now a pariah subject to travel bans. But the economic toll has been enormous, and this was the gulf that Europe now needed, desperately, to address.

Given its difficulties in dealing with the US during the Trump administration, some leaders on the continent have signaled they’d like to set a new heading, but the continent would also need economic stability to chart any effective course on the world stage – and that meant the EU needed this package including loans, grants and a boost to the community’s budget (in addition to the recovery package, the EU’s next seven-year budget will increase from €959.51 billion to €1.074 trillion).

The wealthier nations of northern Europe will foot more of the bill, as usual, to subsidize their weaker sisters, according to a draft of the proposal seen by Bloomberg. French President Emmanuel Macron and Merkel, leading the two motor economies of Europe, laid the groundwork ahead of the summit, meeting to reaffirm their commitment to an EU recovery fund with few strings attached.

There are long memories in Europe over the events of the past five months. Italy, one of the countries standing to benefit most from the fund, was also the first and most deeply stricken. But it was also one of the first to recover and like most of the continent, especially France and Germany, has managed to stay open by tamping down small outbreaks as soon as they have appeared.

France’s tough new prime minister, Jean Castex, proclaimed last week that it would be compulsory to wear masks indoors everywhere, including all shops and businesses, as well as on all public transport, given the virus’s lingering presence in the country. And they don’t fool around. During the height of the nationwide lockdown, my son was turned back by police for straying too far from his apartment in central Paris.

The result is that France recorded just 697 new cases of Covid-19 on Saturday and 14 deaths, according to WHO figures, compared with 71,484 cases and 921 deaths that same day in the US. (The US has five times France’s population; on that day, it registered more than 100 times the number of infected and 65 times the number of deaths.)

This is very much the case across the European Union, with the exception of Sweden, which prided itself on its economy never closing down and has recorded surges in cases and especially deaths.

Still, Europe, which had closed in March many of its borders between countries that had been opened for 25 years, has now largely reopened them. But the economic burdens of all but total shutdowns of much of Europe’s economy for three months will not be reversed easily or cheaply. Which led to the first two days of this weekend’s European summit dissolving in acrimony.

Dutch Prime Minister Mark Rutte, one of the “frugal four” (along with Austria, Denmark and Sweden), demanded unanimity on dispersal of relief funds to any country in need, which meant that one dissent among the 27 European nations to any country’s request could torpedo it – which could paralyze the whole operation.

In the end, the great victory was shared by Macron and Merkel who celebrated at 5:30 a.m. local time an end to one of the longest summits in European history. As European Council President Charles Michel put it at the end, “We did it! Europe is strong. Europe is united.”

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It had begun to look like Democrats and Republicans in Washington haggling over a third relief package. Not a good example for a continent that has already barred any travel from America, as the virus continues to spread there, thanks to an inept pandemic response by the Trump administration.

In the end, while there was some dissent on the size and structure of relief measures, it was far more muted and narrower than the widening Republican-Democratic rift in Washington.

While Europe has seemed to get a handle on Covid-19 social distancing, testing and contact tracing – which has allowed it to mostly stop the virus from spreading and to move onto dealing with Covid-19’s economic devastation as the next problem to confront – the US does not seem to have completed step one.

As Congress contemplates a second economic stimulus package, Senate Republicans and President Trump can’t agree on whether to include a payroll tax cut, or, strikingly, the White House’s opposition to spending more money on Covid-19 testing.

In short, America could learn so much from Europe, if there were only someone at the top to listen.