EU is looking for new money for medical aid and for economic recovery

Plenary session - Debate on the Future of Europe with the Dutch Prime Minister

The EU finance ministers will again discuss by video on Tuesday what financial resources the European Union can use to absorb the economic and social blows of the corona crisis. This involves raising hundreds of millions of euros from existing funds and assets and from tapping into new money flows.

Relations between the southern EU countries and the northern countries are currently very tense. The Netherlands, Austria, Finland and Germany blocked the opening of the ESM emergency fund two weeks ago. These countries are now accused of not showing solidarity with Italy and Spain, which has been severely affected by the corona virus.

Dutch minister Wobke Hoekstra is faced with the difficult task of showing that the earlier negative Dutch attitude has now eased somewhat, but that the Netherlands nevertheless wants to negotiate by hand on the brakes. The Netherlands has already pledged a billion financial support to combat the medical costs of the corona virus.

The Netherlands is more cautious about a support package for the recovery of the collapsed economies of those southern European countries. Prime Minister Mark Rutte announced last week that he would speak to the prime ministers of Italy and Spain, but that has not yet happened. Prime Minister Rutte also does not want to use the ESM, which was launched in 2012 to save countries in financial difficulties, without restrictions.

The European Commission has proposed to borrow 100 billion euros from banks as EU. EU countries can then borrow favorably from the Commission to finance temporary benefits and short-time working. A number of governments want to issue a new type of Eurobonds under the leadership of Paris and Rome. The Netherlands is strongly against issuing such eurobonds, because billions of debts are then jointly incurred. The Netherlands and Germany should have none of that.

The chief of that European emergency fund ESM has called for solidarity from the EU countries. Director Klaus Regling argues for a joint financial answer and pointed out last week that European debts are nothing new. Part of that ESM fund could be released quickly for countries in need. The Netherlands does believe that these countries should restructure their economies at a later stage. Italy is pertinent on conditions. The nineteen euro countries are the shareholders of that fund, but the non-euro countries are also allowed to have a say in Brussels today.