The EU sees itself not just as a political and economic union, but also united in values, which makes what happened when the coronavirus started to spread all the more painful. As doctors in northern Italy and western France were forced to choose whose lives they could save because they lacked hospital beds and equipment, their European neighbors sealed the borders. COVID-19 put an abrupt end to the free movement of people within the Schengen zone, member states squabbled among themselves for access to personal protective equipment, and national self-interest was the order of the day. In the end, European Commission president Ursula von der Leyen had to apologize to Italy, Spain and France for the EU’s failure to stand by their side and address their needs. ADVERTISING This, then, was the backdrop to last Friday’s virtual EU summit. French President Emmanuel Macron had long advocated that the community stand shoulder to shoulder with the worst affected countries, and asked for generous rescue packages. The survival of the EU itself was at stake, he had said. Initially coronabonds seemed a possible answer to the problem, but many fiscally disciplined northern countries oppose mutualisation of debt. According to EU guidelines, the debt to GDP ratio must not exceed 60 percent; France and Spain are well into the 90s, Italy is above 131 and Greece is above 180. Help for Macron’s position came from an unexpected but influential corner. German Chancellor Angela Merkel joined him in urging the Commission to issue bonds that would then be passed through the EU’s multiannual budget — an elegant solution avoiding the need to issue coronabonds. The two leaders tested the water when they suggested a 500 billion euro rescue package. Von der Leyen topped them by proposing a package worth 750 billion euros, two thirds of which would be disbursed as grants and one third as concessional loans. Everybody knows this is an existential moment for the EU and that agreement will have to be found. Cornelia Meyer Everybody knows this is an existential moment for the EU and that agreement will have to be found; Dutch Prime Minister Mark Rutte said as much before the summit. The “frugal four” — Denmark, Sweden, Austria and the Netherlands — still oppose the de facto mutualisation of debt this solution represents, but some of the “Club Med” states feel the proposal does not go far enough. There is acrimony over whether repayment of debt should start before or after 2028. Few agree on the distribution between grants and loans. It is not therefore surprising that leaders could not reach a conclusion on Friday. However, there is good reason to be optimistic that come July the heads of government can hammer out a compromise when they meet face to face. On one hand, it is in nobody’s interest that Greece and Italy bring their debt to GDP ratio further out of EU compliance, which is why they need grants rather than loans. It is also in nobody’s interest to leave the worst affected countries by the wayside. On the other hand, everybody needs to appreciate the northern countries’ concern for how much of a tax burden they can heap on their voters. It is significant that Germany, formerly the most frugal nation in the EU, saw the signs and swung behind Macron. Berlin will hold the rotating presidency of the EU Council for the next six months. This may well be Merkel’s swan song on the international stage, which means she can take more risks in supporting the weaker nations than if she had to run for re-election next year. Wolfgang Schäuble, speaker of the Bundestag and a former German finance minister, said it was time to remember that Europe was first and foremost a community of values, and with those values came obligations to help the weaker members. If one of the most hardline ministers during the financial crisis in Greece can say this, who dare disagree? Cornelia Meyer is a business consultant, macro-economist and energy expert. Twitter: @MeyerResources Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News" point-of-view