Exhausted European Union leaders finally agreed a €750 billion coronavirus stimulus fund to reboot the bloc’s economy on the fifth day of summit talks in Brussels on Tuesday.
The European Council meeting was one of the longest in history. After more than 90 hours of negotiations, it ended at 5.30am, just 30 minutes short of the record-breaking Nice Summit in 2000, after beginning on Friday morning.
The masked 27 heads of state and government were bitterly divided over the stimulus plan, which will see the EU raise common debt on an unprecedented scale, in what is a major step towards closer integration.
The European Commission will raise capital against the EU Budget with richer countries effectively underwriting loans to fund spending in countries that would struggle to take on the debt on their national balance sheets.
“We did it! Europe is strong. Europe is united,” said Charles Michel, the president of the European Council, after the summit, which was meant to end on Saturday.
“These were, of course, difficult negotiations in very difficult times for all Europeans,” he said, before attributing success to “the magic of the European project”.
Leaders argued over how money from the rescue fund should be paid out to the hardest hit countries in repayable loans and how much in grants, and the size and rules of the trillion euro EU Budget for the next seven years.
At the end of their first face-to-face summit in five months, they agreed that €390 billion of the rescue plan should be handouts and €360bn in loans.
Leaders also agreed a new €1.074 trillion Budget, the first to be agreed since Brexit and first without UK contributions since it joined the bloc in 1973, completing a €1.82 trillion package.
Germany and France had insisted at least €400bn of the package must be handouts rather than loans in order to shield the fragile economies of southern Europe.
Emmanuel Macron, who accused Mr Rutte of taking on Brexit Britain's intransigent role at the summit as the pair clashed during heated talks, called the compromise a “historic day for Europe”. “There were extremely tense moments," he admitted.
German Chancellor Angela Merkel said, "We have laid the financial foundations for the EU for the next seven years and came up with a response to this arguably biggest crisis of the European Union."
Mr Rutte, whose conservative VVD party faces a strong challenge from far-right eurosceptic parties in elections next March, denied that he had agreed to create a “transfer” or “debt union”.
“This is a one off,” he said, before pointing out the rescue fund was temporary.
The northern frugals, who argued grants were pointless unless they brought labour reforms in southern member states, secured an “emergency brake” on the disbursement of money.
EU governments wanting the rescue cash must submit recovery plans. The other countries will be able to review and demand changes to the plan in the three days after it is submitted.
“Countries will know that there is an extra set of eyes, all of us in the European Union sitting at that table, 27 separate countries, watching whether you are doing what you have committed to do,” Mr Rutte said.
Spain and Italy had rejected Mr Rutte’s call for an outright veto on spending but Mr Rutte successfully fought for larger than usual rebates for net contributors to the EU Budget.
The Budget negotiations were also tough, with the EU dropping its demand that coal-dependent Poland commit to being carbon neutral by 2050 before being able to access some funds. .
Hungary’s Viktor Orban had threatened to scuttle the whole package, which required the support of all 27 leaders, if the bloc insisted on making EU cash conditional on respect for the rule of law.
EU leaders watered down the rule of law condition to bring Hungary and Poland, which have both been at loggerheads with Brussels over their democratic standards.
But that is likely to mean that the package, which must now be ratified by the European Parliament, will face objections from MEPs, who also did not want Budget cuts.
“We have a lot of work ahead of us but tonight is a big step forward towards recovery,” said Ursula von der Leyen, the president of the European Commission.
Oxfam criticised the deal for "failing to match the urgency of our current situation and the challenges ahead".
"Inequality within and beyond the EU is growing, and the recovery plan lacks ambition in addressing the socioeconomic impact of the pandemic and the looming food crisis," said Marissa Ryan, Head of Oxfam’s EU office
"The cuts to the development aid budget will come at a real human cost. The pandemic is already pushing millions of people to the brink of starvation and increasing extreme poverty. Meanwhile in developing countries, health systems are ill equipped to respond.
"The twin crises of COVID-19 and the climate emergency demonstrate the critical importance of international aid to save lives and build a greener, fairer and more resilient society. Despite the disappointing outcome of the EU summit negotiations, the EU must move swiftly to tackle the food crisis and support health systems."
Meanwhile, the European Trade Union Confederationis (ETUC) said it was "good news for the 60 million people across the EU who depend on rapid investment to save their jobs or avoid long term unemployment”.
"However, the reduction of the amount of grants in the recovery fund brings an unacceptable cut to the just transition fund and to the health measures," warned ETUC General Secretary Luca Visentini.
"The overall EU budget is also not big enough to deliver green and digital transformation or adequate resources for cohesion and social priorities.
"The insistence of the ‘frugal four’, better defined as the ‘mean five’, to cut funds and introduce Council control over national recovery plans, potentially leading to old-fashion structural reforms, came together with their selfish interest to increase rebates and preserve tax havens, and giving up on the respect of the rule of law.
"We will stay vigilant to make sure that the national reform plans approval process and so-called ‘Emergency Brake’ are not used to impose further austerity and cuts, so playing into the hands of anti-European populists."