EU heads of state and government gathered on Friday to discuss the bloc’s COVID-19 recovery fund and the next long-term budget.

Leaders are under a strong pressure to find a compromise over the €1.85 trillion ($2 trillion) budget proposal, which includes a €750-billion ($825-billion) new recovery instrument to help relaunch the European economy after the COVID-19 crisis.

If the summit ends without an agreement over the weekend, the financial markets are likely to react on Monday morning and aggravate the economic crisis.

Dutch Prime Minister Mark Rutte evaluated the chances of an agreement to 50%, while German Chancellor Angela Merkel said: “The differences are still very, very big and so I can’t yet say whether we will get a solution this time already.”

“Stakes couldn’t be higher”, said Ursula von der Leyen, the president of the European Commission, ahead of the negotiations, which will probe if the EU can “emerge stronger from the crisis”.

Charles Michel, the president of the European Council, admitted to facing “very difficult negations”. But he is convinced that it would be possible to reach an agreement if there is a “political courage” to do so.

French President Emmanuel Macron thinks the upcoming hours will mean “a crucial test for Europe’s ambitions” and commitment towards an economic recovery that involves social and environmental development.

The post-COVID reconstruction scheme would provide €250 billion worth of loans and €500 billion in grants for EU member states, financed by a credit that the European Commission takes from the international financial markets.

But European governments have very diverging opinions on the overall size of recovery fund, the balance between grants and loans, the methodology upon which grants would be distributed among member states, and the introduction of own new budgetary resources as well.

The main division line is between the southern and northern member countries. The first group pleas for EU solidarity to mitigate the economic crisis caused by the pandemic, but the so-called Frugal Four — the wealthy group of Austria, the Netherlands, Sweden and Denmark — insists on budgetary discipline.

Also, the Hungarian and Polish governments contest a new condition of the proposal, which would link EU grants to the rule of law criteria. Together with the Czech Republic, the countries also plea for a fairer distribution of the recovery fund.

This is the first actual meeting of EU leaders since the COVID-19 outbreak.

The leaders need to follow strict rules to stem the virus’s spread: they are not allowed to shake hands, required to maintain social distance in the conference room, and can only bring a reduced number of staff with them to the building of the European Council.

Copyright 2022 Anadolu Agency. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.