Yes, the European Union approved the recovery fund at the cost of large grants

The alternative was disaster, the beginning even of the disintegration of the European Union. That was the challenge, so the mountain could not be satisfied with giving birth to a mouse. So the marathon summit of Heads of State and Government, the so-called European Council, ended up approving the EUR 750 billion Recovery Fund at the dawn of the fifth day of the longest opera performed in Brussels in the last thirty years. Initially presented as a work of the good and the bad, of frugals and manirrots, of black-legged democrats and authoritarian deviationists, the outcome has ended up giving everyone a little bit of glory with which to present themselves to their domestic audience with a victory cheer, in keeping with the harmful but, after all, traditional custom of each of the Twenty-Seven telling their own version of the negotiations in terms of defeat (almost never) or victory (almost always) over their colleagues and counterparts in the European Council. 

In the absence of verification on the ground, what has been agreed is rightly described as a historical milestone. This is because the financing of this Recovery Fund will, for the first time, be fed by joint debt, issued by the Commission on behalf of all members, and endowed with the highest rating, the coveted AAA. The Commission's initial proposal of EUR 750 billion has been maintained, although the proportion between non-repayable grants - which will eventually be EUR 390 billion - and loans of EUR 360 billion has been changed, in other words, loans to be repaid, albeit on advantageous terms because they are acquired on the market with the Commission's prestigious triple-A label. 

The two driving forces of the EU, France and Germany, which were behind the creation of the fund and its size, are therefore winning, and the two most indebted countries, both of which already owe much more than they are capable of producing: Italy and Spain, are winning. The 140 billion that Spain will theoretically receive will have the supervision of the rest. Madrid and Rome have dodged the Dutch claim that anyone could examine and assess the reforms of the southern manirrots, but in exchange for any capital being able to activate the so-called "emergency brake", that is, bring the allegedly defaulting country before the whole European Council for explanation and justification. It is a clause that, for example, will allow Pedro Sánchez to resist fulfilling domestic commitments such as those signed with Bildu regarding the repeal of the labour reform. For the same reason, he now has a very powerful argument for finally tackling the reforms in so many other fields, which the EU has been demanding since the times of Rodríguez Zapatero, but which neither he nor Rajoy nor Sánchez, for reasons of ephemeral or nefariousness, have not found the time or the desire to undertake, putting it all down to the inertia of sectors that, like tourism, have collapsed with the blow of a virus.

Orphans of the self-exclusive United Kingdom, the Northern Calvinists have found in the Netherlands the perfect successor to the EU in terms of its ability to exasperate the rest of its members. Without the enormous power of London the Dutch have nevertheless set themselves up as the champions of orthodoxy, leading the frugals, a derogatory term to blame them for their sense of responsibility in administering the accounts. Supported by Sweden, Denmark, Austria and finally also Finland, they have obtained the greatest concession: the annual rabate cheque, that is, the return of a part of their contributions as net contributors to the EU budget. It was a concession that Margaret Thatcher wrenched for the United Kingdom, which other countries then took advantage of on her rebate.

The new president of the European Commission, Ursula von der Leyen, wanted to put an end to this "privilege", but in the end the harsh Liberal Mark Rutte prevented it, so that, from the Multi-annual Financial Framework (MFF) 2021-2027, which was negotiated in parallel with the Reconstruction Fund, she will take a pinch of 1,921 million, but less than what Germany (3,671 million), Sweden (1,069 million), Austria (565 million) and Denmark (322 million) will receive. As you can see, something to brag about to your fellow citizens on their return from such a long and hectic weekend in Brussels. 

But, beyond the money, the most important concession has been that received by the two countries most questioned in terms of their respect for the rule of law: Hungary and Poland. The Commission, with the strong support of the countries most attached to democratic values as the very essence of the EU, has been trying for a long time to make the receipt of EU funds conditional on respect for this very rule of law. The Hungarian Viktor Orban, who is increasingly displaying ostensible forms of autocracy, has succeeded in decoupling the two, which means that he will be even freer to welcome media that do not follow his dictates or to encircle dissidents. The same "achievement" will be noted by the Poland of Duda and Kaczynski, who support a judiciary that is subordinate to the executive. These temptations could also be taken up by another member, who could use this advantage gained by Orban to turn the separation of powers and the corresponding institutional architecture of the country in question upside down. 

The price to be paid for the establishment of the Reconstruction Fund is high, especially if we also consider the heavy cuts foreseen in the MEP to the items related to innovation and to the so-called green transition, the latter being the main goal that Von der Leyen had set in her first term as President of the Commission. But for the time being, the EU is alive, it is facing with vigour the most urgent thing, which is to alleviate the ravages of the pandemic, and it is laying the foundations for a certain federalisation by mutualising the debt in some way, thus emulating the act by which Alexander Hamilton made the real birth of the United States of America possible.