The European Council, composed of the leaders of the EU’s 27 member states, agreed on a €750bn ($858bn) package to help countries’ economies recover from covid-19, part of a €1.8trn EU budget for the next seven years. The hard-fought deal shows that the bloc’s members have the sense of solidarity needed to respond collectively to disasters, despite internal political splits and grumbling from some of the rich members that foot most of its bills.

The covid-19 recovery package began as a proposal by Germany’s chancellor, Angela Merkel, and France’s president, Emmanuel Macron. It responded to the threat that the coronavirus could exacerbate the EU’s economic divisions: countries with severe epidemics, or heavy debt loads constraining government spending (such as Italy), faced much worse recessions than those with light epidemics and little debt (such as Germany).

The European Commission, the EU’s executive arm, had originally envisioned €500bn in grants and €250bn in loans. Most significant, the package was to be financed with bonds issued by the commission—the first time EU countries would issue such an enormous amount of collective debt.

The proposal for grants was bitterly opposed by a group of wealthy, mostly northern net-contributor states (nicknamed the “frugals”), led by the Netherlands and joined by Austria, Denmark, Finland and Sweden.

Mark Rutte, the Dutch prime minister, insisted that countries receiving grants carry out economic reforms, and that each individual country be empowered to veto every other country’s plan to spend the aid. As the summit stretched into a third and then a fourth day, the countries most eager for aid—Italy, Spain and Portugal—reproached the “frugals” for failing to compromise.

Another dispute centered on Hungary, where the increasingly autocratic government of Viktor Orban faces EU disciplinary proceedings over the rule of law, and where EU investigators have found extensive corruption. The commission (backed by France, the Netherlands and others) wanted measures to cut off aid if countries failed to respect the rule of law. For Hungary and Poland, which also faces rule-of-law proceedings, this was a red line.

In the end, these seemingly principled disputes were resolved through old-fashioned horse-trading. Mr Rutte and the frugals saw the amount of grants cut to €390bn, while loans were raised to €360bn. The rebates they get to lower their net contributions to the EU budget were increased, along with the amount they get to keep from customs revenue (most of which goes to the EU).

To placate their demands to hold down the overall EU budget, there were cuts to scientific research, industrial investment, rural development and other programmes. Mr Orban and Charles Michel, the European Council president, settled on language putting off mechanisms for rule-of-law sanctions to another day.

The overall result fell short of what some had hoped for. But it was greeted as a triumph in Paris and Berlin, and elsewhere by believers in a more powerful and more federal EU. The programme is equivalent to 4.7% of the EU’s GDP, a macroeconomically significant amount that comes on top of large stimulus spending by national governments. Stockmarkets were buoyed by the news. And it means the EU will engage in large-scale joint borrowing for the first time, giving the bloc significant fiscal resources to fight a recession collectively.

The resistance of Mr Rutte and the frugals was based on the fear that once Europe has agreed to use collective debt once, it will probably do so again. For advocates of a stronger EU, that is not a fear but a hope.