Italian Prime Minister Giuseppe Conte will ask Dutch Prime Minister Mark Rutte on Friday to agree to the EU corona recovery fund. Italy is one of the EU countries whose economy has suffered significant damage from the corona pandemic and urgently needs the additional EU support.
European leaders will meet next Friday to negotiate the 750 billion-euro recovery fund linked to the European Union's multiannual budget. They will see each other in Brussels for the first time in months. Southern countries and frontrunners like Germany are pushing for a swift agreement, but the Netherlands and other ‘frugal’ countries are in no hurry.
Earlier this week, EU President Charles Michel already visited Rutte to urge some Dutch flexibility, and in the coming days, the Dutch prime minister will also visit German Chancellor Angela Merkel.
The Netherlands believes that financial aid for corona damage should not only be grants but also conditional loans. This way, EU lenders can first have Italy reorganize and restructure its economy.
The Netherlands does not want to make the same mistake as with financial aid to Greece, which received many loans but had to severely cut spending in return. In hindsight, it turned out that Greece austerely cut itself to the bone. Since the Netherlands does not want to give ‘free money’ to the Italians, Prime Minister Rutte wants to insist that Italy modernizes its economic structure.
But the Italian two-party coalition (of conservative centrist democrats and the populist Five Star Movement) strongly disagrees on how the corona aid money should be spent. The centrist democrats fall back into their old habit of primarily wanting to invest in (new) infrastructure, while the Five Star Movement wants to raise the minimum wage and social benefits.
Italy says it has no problem with the Dutch demand that the country implement reforms in exchange for aid, said the Italian ambassador to the EU ahead of Conte’s visit to Rutte. But that aid cannot consist solely of loans, as the Netherlands wants.
Just earlier this week, Prime Minister Conte more or less presented his own restructuring plan, although it is not yet clear whether the Italian coalition agrees with it. Conte will probably try to convince Rutte that Italy really does intend to modernize and that Rome will not squander the EU money.