Italian Prime Minister Giuseppe Conte will ask Dutch Prime Minister Mark Rutte to agree to the EU corona repair fund on Friday. Italy is one of the EU countries where the economy has suffered much damage from the corona pandemic and urgently needs the additional EU support.
European heads of government will meet next Friday to negotiate the € 750 billion recovery fund linked to the multi-annual budget for the European Union. They meet again in Brussels for the first time in months. The southern countries and pioneers such as Germany insist on an early comparison, but the Netherlands and other 'economical' countries are not in a hurry.
Earlier this week, EU President Charles Michel was already visiting Rutte to insist on some Dutch flexibility, and the Dutch Prime Minister will also visit German Chancellor Angela Merkel in the coming days.
The Netherlands believes that financial aid for corona damage should not only consist of gifts, but that it should also be loans under conditions. This will allow the EU lenders to first allow Italy to reorganize and restructure the economy.
The Netherlands does not want to make the same mistake as with financial support to Greece at the time, which was able to obtain many loans, but had to make substantial cutbacks in return. In hindsight, it turned out that Greece had almost cut costs. Because the Netherlands does not want to give away 'free money' to the Italians, Prime Minister Rutte wants to insist that Italy modernize the economic structure.
However, the Italian two-party coalition (of conservative center democrats and the populist Five Star Movement) strongly disagrees on how to deploy corona aid money. The center democrats are reverting to their old habit of mainly investing in (new) infrastructure, and the Five Star Movement wants to raise minimum wages and benefits.
Italy says it has no problem with the Dutch demand that the country implement reforms in exchange for help, said the Italian ambassador to the EU in the run-up to Contes's visit to Rutte. But that aid cannot consist solely of loans, as the Netherlands wants.
At the beginning of this week, Prime Minister Conte more or less presented his own restructuring plan, of which it is not yet clear whether the Italian coalition agrees. Conte will probably try to convince Rutte that Italy is going to modernize and that Rome will certainly not squander EU money.