Friday 14 May 2021
Home EUC Stingy Four and EU slightly closer compromise on budget and corona

Stingy Four and EU slightly closer compromise on budget and corona

At their video summit on Friday, the EU heads of government held 'constructive' discussions on the EU multi-year budget (1180 billion) and the corona recovery fund (750 billion), but have not yet agreed. 

However, after a four-hour video discussion, Heads of State or Government said they would overcome the crisis at a forthcoming summit, presumably in July, and pledged to reach an agreement, despite the huge disparities between Member States. 

As expected, there were no conclusions or results after the video conference. The discussion was intended as a first opportunity to express their priorities and express concerns about the package, euphemistically covering the remaining contradictions. In it, the 'miserly four' (the Netherlands, Austria, Denmark and Sweden) line up directly opposite the other EU countries.

Dutch Prime Minister Mark Rutte said afterwards that the money from the corona fund should in any case end up where it is really needed. That is why he does not want to use the current EU distribution key, which is based on how countries stood before the pandemic, for corona aid. This current distribution not only allocates large amounts to the severely affected Italy and Spain, but also (for example) to Poland or other countries that were much less affected.

"It is important to help each other," Rutte underlined. It is crucial, he says, that “countries that were not thirsty” should not fall further behind and that the union should not become unbalanced. But these countries should also be expected to show 'solidarity' to 'do everything they can to' take care of themselves in the future ', he says. Reforms of pension systems and the labor market, and tax collection, "all those things are needed," the prime minister warned, he repeated his plea.

With its hard line, the Dutch government underestimates the “problems that come our way,” said former president Nout Wellink of De Nederlandsche Bank (DNB). He expects the consequences of the crisis to be "very great", so the government must ask itself, "To what extent are you willing to show solidarity?" "Because this is the moment of truth that is coming our way."

Wellink says that donations, the major stumbling block for the Netherlands, are no problem for him. Apparently they are not aware that the debt problems that are coming our way may require very great sacrifices from us if we want to remain part of Europe and keep Europe together, he said. According to Wellink, the Netherlands “learned nothing from 2012 in that sense” when the Greek debt crisis divided the European Union. 

Christine Lagarde, the President of the European Central Bank (ECB), has warned that there will be risks to the financial markets if there are no aid packages for economic recovery. France and Germany would insist that the matter be closed next month. 

European Parliament President David Sassoli told leaders that the current package is ambitious, but actually "doesn't go far enough for what is needed." He warned that the European Parliament, which must agree to the multi-annual budget, will not accept anything less than the envisaged package.

"We should consider this current proposal as a starting position," said Sassoli, which still needs to be improved. The European Parliament wants a bigger budget, while some countries still want to cut back. Sassoli agreed with Rutte and does not support aid to the worst-hit Member States in the form of loans alone. That would lead to "uneven effects on Member States' debt burdens and would only cost the EU as a whole more money."


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