Taoiseach Micheál Martin has said Ireland will be a net contributor to the EU's €750 billion Covid-19 recovery fund, which EU leaders are currently negotiating on the second day of a summit in Brussels.

Speaking on his way into the summit, Mr Martin said that a European-wide economic recovery was more important for Ireland than what the country "got back" from the overall fund.

The Taoiseach said that despite the deadlock in talks late last night over how payments from the fund would be vetted by member states, there was evidence that leaders had, at the last minute, taken a step back to look at the "bigger picture".

Mr Martin said: "[Leaders] are saying very clearly we’ve got to make up our minds, notwithstanding all our national member state interests. 

"Given the enormity of Covid we need to put a package together that can respond to Covid. People have died, are dying from Covid."

Divisions remain over the size of the fund, what the ratio between grants and loans will be, and what role member states will have in overseeing the allocation of money from the fund to national capitals.

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The Netherlands has been pushing for the right for countries to veto disbursement of funds to other member states if they have not stuck to the reform programme upon which funds are conditional.

Last night Dutch Prime Minister Mark Rutte said: "What this is about is not giving money to countries in the short term: countries can take care of themselves in the short term. The problem is that a number of countries need support for the somewhat longer term in order to really emerge from the crisis." 

Mr Rutte said his preference was for the money to come by way of repayable loans. However, he accepted that other countries were looking for grants.

"Then I think it is important, even more important, to make sure that those reforms take place because I need to be able to explain to myself and to you and everyone else that a country like that will be able to do it itself next time," he said.

The Taoiseach said that EU institutions, like the European Commission, have the proper capacity to decide whether or not a country has stuck to a reform programme, rather than EU leaders via the institution of the European Council.

"The capacity of the [European] Council to start getting into the detail of programmes would be a very difficult proposition down the road in terms of unintended consequences," he said.

"I think to be fair to the Netherlands, I don't think they envisage this would be a routine, regular [occurrence].  Rather Mark Rutte is saying this would be an exceptional mechanism that would be deployed in an exceptional way."

Mr Martin said that the size of Ireland’s allocation under the recovery fund was less important than the ability for the European economy to recover as a whole.

"Remember, Ireland’s a net contributor here," he told reporters. "We’re coming in with strong bona fides. We’re saying Europe has to recover because we’re an exporting nation. We want a European-wide recovery because that will help to underpin an Ireland wide recovery.

"That’s the stance we’re taking as opposed to looking at how much will we get back. We’ll be a net contributor at the end of the day out of all of this in any event. 

"We do get the big picture that Europe needs to do something dramatic and something impactful to a collective approach to raising substantial funds and allocating it to where it matters in terms of getting an economic recovery going."

The pandemic has caused economies to plunge, and the response of some member states at the outset was regarded as lacking a sense of solidarity for those countries in the immediate front line.

Mr Rutte has said the chances for a deal at 50-50 since, together with Denmark, Austria, Finland and Sweden, he was faced with countries from France to Poland demanding an end to reductions to the wealthy states' budget contributions.

Mr Rutte also said making EU handouts conditional on respecting democratic standards was key, an idea that prompted nationalist Hungarian Prime Minister Viktor Orban to threaten to veto the entire plan.

"The stakes couldn't be higher," European Commission President Ursula von der Leyen said yesterday. "The whole world is watching us."

Countries on the Mediterranean now want the recovery financing to prevent their economies taking on ever greater burdens of debt.

"The big picture is that we are faced with the biggest economic depression since World War II," Greek Prime Minister Kyriakos Mitsotakis said.

"We need...an ambitious solution because our citizens expect nothing less from us."

Additional Reporting Reuters