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| - EU leaders will consider new proposals on Saturday to overcome resistance from the Netherlands and Austria to their huge post-virus economic recovery plan on the second day of an extraordinary summit. European Council president and Brussels talks host Charles Michel met late into the night with President Emmanuel Macron of France and Germany's Chancellor Angela Merkel to thrash out a new package. His initial blueprint of a 750-billion-euro recovery package to kickstart economies ravaged by the coronavirus and its attendant lockdowns ran into stiff resistance on Friday from the member states known in Brussels as the "Frugals". Dutch Prime Minister Mark Rutte admitted that he had been alone in insisting that member states retain the final say over approval of any EU funding for national recovery plans in his more heavily indebted partners like Spain and Italy. But he insisted oversight was necessary to oblige them to reform their labour markets, and said the atmosphere at Friday night's dinner had turned "grumpy". But he said that southern partners should not drag their feet on reform "to make sure that next time, when for whatever reason there is a crisis again, economic or otherwise, countries are better able to take care of themselves." "Of course we are helping Europe again, but what you are talking about is the economic consequences of the coronavirus, the economic consequences. It's not like money has to go to a country tomorrow," he said, adding that while the Michel plan involves grants to countries "I was just thinking loans." Austria has also been a holdout, and Chancellor Sebastian Kurz wants the recovery fund to be smaller, tweeting to say he "clearly rejects" the sum of 500 billion euros that would be grants and subsidies to government, the rest of the package coming as loans. "If the money is not used to invest in the future, if it does not go hand in hand with necessary reforms in states that are simply broken in their systems... then all this will fizzle out," he warned. Amid rising tension, Michel suspended the Friday talks earlier than expected and called a new session for 11.00am (0900 GMT) on Saturday, before when he will meet separately with some leaders to try out his new proposals. Diplomatic sources told AFP that this would involve a new balance between loans and grants in the final package, but that cuts to the total size of the plan would be linked to a reduction in the rebates that some richer countries like Austria and Netherlands get on their EU contributions. "We'll have to restart things differently to save the summit," one senior diplomat said. Another diplomat from a non-frugal state warned: "What the Netherlands wants is legally impossible and politically difficult to swallow." Before the talks Rutte insisted he wanted to show solidarity with countries that don't have the budget to stoke a meaningful recovery. "But at the same time, you can also ask those countries to do everything possible to solve this yourselves the next time. And you do this through reforms, in the labour market, in pensions etc," he added. The rescue package is in addition to the planned 1,074-billion-euro seven-year EU budget from 2021 to 2027 that the leaders must also agree on in the coming weeks or months. Rutte's position has been backed to varying degrees by fellow members of the so-called "Frugal Four" -- Sweden, Denmark and Austria. Finland has also been calling for cuts to the Michel plan. bur-dc/pdw/wdb
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