German Chancellor Angela Merkel said Monday it is unclear whether EU leaders will reach agreement on a 750-billion-euro pandemic recovery fund at this week's summit, amid resistance from more frugal member states.

"The road that we have to tread is still rocky," said Merkel ahead of Friday's EU special summit.

"I don't know if we will reach an agreement."

She stressed however that the recovery fund "must be massive" and not cut down in size.

"Because the task is enormous, the answer must also be huge," she said, after hosting Italian Prime Minister Giuseppe Conte for talks.

"It must be particularly powerful in order to signal clearly that Europe wants to hold together in this difficult time. There is a political dimension to it".

Conte and Merkel
On the same side of the fence: Conte and Merkel at the German governmental guest house in Meseberg, outside Berlin, on Monday Photo: POOL / Tobias SCHWARZ

While the recovery fund was officially put forward by the European Commission, Merkel had drawn up the backbone of it along with French President Emmanuel Macron.

The move to offer grants to the EU countries hardest hit by the pandemic, such as Italy, has smashed through long-held stereotypes of Germany as a "frugal" country.

Nevertheless, other northern member states -- the Netherlands, Austria, Denmark and Sweden -- have taken on the role of reining in spending.

They insist that loans with tough conditions attached, rather than grants, should be the preferred method of rescue.

But Conte urged a quick deal.

"We have to act swiftly, because history teaches us that the best reaction is not worth much if it comes too slowly."

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