The four ‘frugal’ EU countries— the Netherlands, Denmark, Sweden, and Austria—do not realize the seriousness of the coronavirus crisis, says the European Parliament President David Sassoli. The Italian makes “an appeal to their responsibility” and warns against “rigid thinking.”
According to Sassoli, there is no opposition between ‘rich EU countries’ and ‘poor EU countries,’ but there are countries that “are aware of the challenges the EU currently faces,” and apparently these ‘frugal four’ are not. They published a proposal for a European recovery fund last weekend, which clashes in key aspects with the earlier Franco-German proposal from Macron and Merkel.
The four do not want to provide grants or donations, but loans; they want these to be short-term and at most two years; they want them not unlimited but only under certain conditions; they do not want the EU to manage the fund; they do not want to increase their annual contributions to the EU but believe the EU should make budget cuts.
Austria, however, seems to be shifting somewhat in its resistance to coronavirus aid to heavily affected EU countries. According to Austria, some of the money from an emergency fund can indeed be a grant. Austria sees these grants as part of a compromise. The ECB also appears to be preparing to put more money into such a coronavirus fund.
The European Central Bank (ECB) will very likely expand its bond-buying program further next month to provide additional support for the eurozone economy. Since inflation is low, there is room to innovate and to "act quickly and forcefully." At the last interest rate decision (end of April), the ECB did not yet expand the emergency purchase program. However, the central bank indicated it was prepared to increase the program by 750 billion euros.
On Wednesday, the European Commission will present its proposals for adjusting the EU multiannual budget, including the mega recovery plan. It is expected that European Commission President Ursula von der Leyen will come forward with a compromise that lies between the approach of ‘the two EU powers’ and ‘the frugal four.’
If that compromise prevents the urgently needed corona recovery fund from collapsing at launch, much will have been achieved. The 27 member states must unanimously agree on the size of the budget and the recovery plan. A special summit of heads of government is planned for June to discuss this.
“I ask everyone to make this historic moment count. Everyone benefits from the single European market; the countries objecting to support belong among the countries that benefit the most. I hope everyone appreciates that,” said Parliament President Sassoli.