EU Council head tries to win over 'Frugal Four' on budget

BRUSSELS (AP) — With pressure mounting to reach an agreement on a post-coronavirus economic recovery plan, the president of the European Council on Friday tried to win over the so-called group of “Frugal Four" member countries with new proposals.

Charles Michel’s latest offers keep the size of the recovery fund, which is meant to help EU countries weather the shock of the economic crisis, at 750 billion euros ($850 billion).

But to win broad support for the package, he offered some countries financial incentives on their contributions to the wider EU budget, which pools money by the bloc's 27 countries to spend on common goals like development, fighting climate change and supporting key industries like agriculture.

Speaking during a news conference on Friday - a week before EU leaders meet physically in Brussels in a bid to secure a deal on the recovery fund and the budget - Michel proposed an adjusted budget for the 2021-2027 period amounting to 1.074 trillion euros.

In a bid to convince holdouts, he said some countries that pay more into the budget than they receive would get rebates on their contributions. Those countries include the “Frugal Four” who are opposed to the makeup of the recovery fund — the Netherlands, Denmark, Austria and Sweden — as well as Germany.

Michel's offer reflects the desire among many EU leaders to make the recovery fund operational as soon as possible as economies sink into recession and people lose jobs.

Under current proposals by the European Commission, the 750 billion-euro recovery fund aid would include 500 billion euros in grants and 250 billion euros in loans for EU countries.

Crucially, the grants would be backed by common debt among EU countries. The European Commission has a triple A credit rating, which would...