European Union leaders during a round table meeting at an EU summit in Brussels, July 2020. 

EU leaders head into a second day of discussions over the coronavirus recovery package, with talks hitting roadblocks on Friday night.

The meeting is set to reconvene at 11.00 CET, with hopes to broker a compromise on the trillion-euro rescue package.

 The Commission has proposed a recovery fund totalling €750 billion and has backed a joint Franco-German motion that most of the money — €500 billion — be dished out as grants to the member states most economically impacted by the COVID-19 pandemic. There is also the trillion-euro EU budget, also known as the Multi-annual Financial Framework (MFF) at stake.

Talks hit the rocks over differences the conditions attached to accessing the money.

Southern member states — Italy and Spain in particular — are in favour of the current proposal but they are opposed by the so-called “Frugal Four” — Austria, Denmark, Sweden, and the Netherlands — which want the amount to be handout out as grants and are wary of pooling debt with less solvent countries.

Leaving the summit last night, Dutch prime minister Mark Rutte said that the talks had turned ‘fractious’.