On Monday, July 20, European leaders reached a historic agreement on the EU budget and coronavirus recovery fund. But it was hardly a done deal.
Austrian Chancellor Sebastian Kurz, along with Mark Rutte of the Netherlands, Mette Frederiksen of Denmark, and Stefan Lofven of Sweden – known as “the Frugal Four” – had opposed the EU’s €750 billion stimulus ever since it was first proposed by the European Commission President Ursula Von der Leyen – to the great frustration of French President Emmanuel Macron and German Chancellor Angela Merkel. Shortly before the start of the July 17 summit, Council President Charles Michel proposed a compromise plan, including the controversial €500 billion in grants, €250 billion in loans, and lump-sum rebates for the Frugal Four and Germany, as a bargaining tool to win over the sceptics. But going into the weekend, reaching a Europe-wide consensus still seemed like a Sisyphean task.
Gap in Austrian Attitudes
In Austria, even the top EU officials in the Chancellor’s own party couldn’t agree.
In a July 15 interview with Euraktiv, Minister for the EU and constitution Karoline Edtstadler (ÖVP) saw no possibility of a deal. “I cannot imagine that there will be an agreement on the weekend,” said Edtstadler. “The positions are too far apart.” They still faced “intensive” negotiation on the balance between grants and loans, she said, and even on the amount of the reconstruction fund.
However, the same day, Austria’s EU Commissioner Johannes Hahn (ÖVP) told Der Standard that he expected a deal to go through. “Yes, I assume there will be one,” Hahn said – perhaps even by Sunday night. “You can tell from the tone of the conversations; there is no longer a struggle for every third decimal place.”
Edtstadler and Hahn’s diverging opinions within the party expose a clear gap in Austrian attitudes towards the EU budget talks. Both Edtstadler and Hahn are close confidants of Chancellor Kurz. Edtstadler, who represents Austria in the European Parliament, was hand-picked by Kurz for the government and even favored her for Hahn’s position. “She is Kurz’s “fixer,” wrote Der Standard, “the one who handles his daily political debate.” Hahn, on the other hand, was Kurz’s political mentor, wrote Die Presse. Thanks to Hahn’s support in 2008, the then 22-year-old Kurz was elected to the National Council.
Bridging Their Differences
As to the difference in opinions, Hahn’s office would not address the question directly. Instead, the commissioner reasserted the urgency to reach an agreement.
“At this time of extraordinary hardship and uncertainty, the Union needs more than ever to show that it is ready and willing to act decisively and chart a path to a better tomorrow,” Balazs Ujvari, Hahn’s spokesperson told Metropole. “Agreement on an ambitious recovery plan with the EU budget at its heart will give the Union the best possible chance of success.”
Hahn, it turns out, was right. Although tense negotiations required EU leaders to extend their stay in Brussels, they ultimately bridged their differences and made a deal. After push back from the frugal four – plus Finland – Michel presented a revised proposal, consisting of a €1.82 trillion budget, €390 billion in grants, €360 in loans, and rebates of €565 million per year (instead of €137 million) for Austria.
Kurz, himself, is satisfied with the outcome, as reported by Der Standard, describing it as a success for the country. “Our commitment paid off, the Chancellor tweeted. “We were able to achieve a good result for the future of the EU and for Austrian interests.”