Economy

Belgium helps Ireland to a Brexit boon

Small states flex their muscles to show their interests cannot be overlooked

Belgian support was key to Minister for Finance Paschal Donohoe winning the Eurogroup presidency. Photograph: Getty Images

Sat Jul 11 2020 - 05:45

Ireland is in line for a sweeter deal than expected after a €5 billion fund for the countries and sectors hit by Brexit was added to a draft plan for the European Union's next budget and recovery package.

The compromise proposal, unveiled by European Council president Charles Michel, aims to broker consensus on a €750 billion recovery fund and joint EU budget which had been held up by disagreements between member states.

It's all down to Ireland working in tandem with smaller states to defend their interests in the bloc. In this case the key ally was Belgium. Both countries had argued that they deserved a greater slice of the recovery fund than initial calculations put them in line for, citing among other things that they would be disproportionately affected by Brexit as close trading partners of the UK.

Belgium was also key to Ireland's other victory this week. Belgian support was key to Finance Minister Paschal Donohoe winning the Eurogroup presidency, giving him a platform and potential to influence that will put Ireland at the heart of debates about the future of the EU in a historic moment of change.

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Some had expected Belgium to follow its neighbour France in backing Spanish finance minister Nadia Calvino for the post. However, the Benelux countries voted as a block for Mr Donohoe after the Luxembourg candidate dropped out, turning the tables on a victory Spain had thought was certain and delivering a surprise victory into Dublin's hands.

Among the motivations for Belgium’s vote, according to insiders, was the Irish candidate’s keen appreciation of the challenge that Brexit poses to states that are geographically close to the UK.

It was a reminder to the EU big four of Germany, Spain, France and Italy that while they are focused on nailing down a generous joint response to the economic damage of coronavirus, the interests of small nations can't be overlooked.

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