Brussels - European Union leaders struck a note of cautious optimism as they headed into a fourth day of crunch talks over a huge post-coronavirus recovery package that has divided the bloc.

"Great Determination"

Initially scheduled for Friday and Saturday, the summit dragged on through Sunday night and into Monday.

Talks are set to resume at 5 pm (1500 GMT), with European Commission President Ursula von der Leyen expecting a breakthrough.

"I have the impression that European leaders really want an agreement," says von der Leyen. "I am positive for today. We are not there yet but things are moving in the right direction."

Describing "progress" made in "incredibly tough" overnight negotiations, German Chancellor Angela Merkel on Monday agreed that she had seen the "framework for a possible agreement."

French President Emmanuel Macron echoed Merkel's rallying cry, saying he would approach the resumed talks "with great determination".

"Elements of progress" had been made on the thorny question of how much coronavirus aid would be offered in grants and how much in loans. But he added: "The ink is not dry."

On the thorny question of how much coronavirus aid would be offered in grants and how much in loans, Macron said "elements of progress" had been made.

Loans or Grants?

Meanwhile, Dutch Prime Minister Mark Rutte, who has been pushing for approval of grants from an aid fund dependent on social and economic reforms in recipient countries, agreed there had been headway.

"It looks more hopeful than last night when I thought: It's over," Rutte said. "I am very pleased with the texts that are now on the table."

However, "it can still go wrong," he warned.

Despite the leaders' upbeat comments, it was unclear whether a deal could be struck on day four. While some last-minute adjustments were made concerning the amount of grants in the recovery package, significant disagreement remains.

The so-called frugal countries - Austria, the Netherlands, Sweden, Denmark and Finland - are pushing for as much money as possible being paid out as loans, not grants.

After the initial proposals foresaw 500 billion euros (572 billion dollars) to be paid out as grants, last night a proposal of 390 billion euros was tabled.

But even if this sum is accepted by all EU countries, many other clefts remain, including whether to tie budget funds to rule of law criteria amid concerns about democratic backsliding in some member states.

Professionalism despite long stressful talks

Talks are believed to have been stormy at times, with reports emerging of tense exchanges between the partly sleep-deprived leaders.

Austrian Chancellor Sebastian Kurz was asked by broadcaster ORF about an incident where Kurz reportedly left room for a phone call, and Macron accused him of not taking the talks seriously.

"It's understandable that some people who maybe did not get enough sleep are showing nerves. We respect that," Kurz said, adding that it was normal to step out of the room from time to time during 20-hour talks.

Kurz stressed that participants had dealt with each other "in a professional manner."

Italian Prime Minister Giuseppe Conte said he was "cautiously optimistic" about a positive outcome later Monday, claiming that overnight talks led to a "turning point."

He called on fellow leaders not to "get stuck on a few billions more or less, on this or that item," lest it would "slow down or even jeopardize the [EU] response [to the Covid crisis]."

A graphic shows the EU economic forecast