Four European countries presented their own stimulus package on Saturday to help the European Union overcome the crisis caused by the coronavirus pandemic, reaffirming their rejection of any mechanism for pooling European debt.
The Netherlands, Austria, Denmark and Sweden, nicknamed the four “Frugal”, want emergency aid for severely affected countries, in the form of one-time loans on favorable terms to be granted within two years, according to a proposal published by the office of Austrian Chancellor Sebastian Kurz.
In addition, the loaned money must be “Geared towards activities that contribute the most to recovery, such as research and innovation, strengthening the health sector and a green transition”, according to the proposal.
A proposal clearly opposed to the Franco-German plan
French President Emmanuel Macron and German Chancellor Angela Merkel put on the table Monday a 500 billion euro plan to revive an economy damaged by the Covid-19 pandemic, via an unprecedented debt pooling mechanism European. The fact that Germany has subscribed to the idea of a jointly issued debt was seen as a decisive turning point in European integration.
→ DEBATE Is the Franco-German recovery plan a historic turning point?
The “Four frugal” for their part, continue to reject any pooling of debt, a process which they believe would allow the least disciplined and weakest European economies to benefit unduly from cheaper financing thanks to the stronger ones in the north. In return for the aid granted, the countries concerned should take “Firm commitment” implement major reforms and respect the imposed budgetary framework.
The four countries also declare that it will be necessary to “Protect spending against fraud” by closely involving European prosecutors and those responsible for the fight against corruption.
Redefine priorities without spending more
The proposal rejects the prospect of any “Significant increase” of the EU budget, as envisaged by the Macron-Merkel plan. Instead, she argues that the EU budget should be “Modernized” and that savings could be made “By redefining priorities in areas least likely to contribute to recovery”.
On the other hand, the expenses linked to Covid-19 could be privileged or temporarily increased. Given the gloomy economic forecasts for this year, “Additional funds for the EU, however they are funded, will weigh even more heavily on national budgets”, depending on the four countries.
The European Commission is due to present its own plan next week to stimulate economic recovery from the crisis. The unanimity of the Member States being required for the adoption of the multiannual budget and the stimulus fund, the position of the four countries “Foreshadows very difficult debates”, underlines a diplomatic source.