Bad news for the interests of the Prime Minister, Pedro Sánchez. Four countries of the European Union, Austria, the Netherlands, Denmark and Sweden, known as the ‘frugal’, have proposed a European Reconstruction Fund opposite whom the leaders of Germany have introduced, Angela Merkel, and France, Emmanuel Macron, aligned with the request from Spain.
These four countries are in favor of this European recovery fund – which serves to help the countries that have suffered the most from the coronavirus crisis – to be temporary and that does not entail the mutulization of the debt nor an increase in contributions from member countries. They also support that these funds are granted as loans and not as simple transfers, as requested by the Spanish president.
The initiative of this group of Member States, to which Efe has had access, comes just four days before the European Commission presents this Wednesday your own recovery plan together with the new proposal for the seven-year community budget, and a week after Germany and France will advocate a half-billion-euro fund on transfers, and not loans.
The proposal claims to seek “an efficient and sustainable recovery” after the COVID-19 crisis and suggests that countries that have been affected by the pandemic could apply for a loan from this fund for a maximum of two years that is “aimed at the activities that contribute most to recovery ”, such as innovation, research or the green transition.
The document from the Netherlands, Austria, Sweden and Denmark, which defends a “temporary and punctual” fund that is an addition to the aid already approved and to the budget for 2021-2027, does not include a specific figure Like the Franco-German plan, but instead proposes to wait for the European Commission to determine first how much money each country needs for financial recovery.
Insists that the recovery of the European economy should not lead to a mutualization of debt nor to an increase in national contributions to the community budget, which in the current period (2014-2020) are equivalent to 1.16% of the Gross National Income of the Member States.
“We cannot accept any instrument or measure that leads to the mutualisation of debt or to significant increases in the EU budget. The Commission’s forecast shows that all Member States will experience an unprecedented economic contraction in 2020, with only a partial recovery in 2021, ‘underline the frugal in the proposal.
These countries want the affected countries to develop their own recovery plan, “a comprehensive assessment of the needs of the most affected (social) sectors and segments” and points out as “essential” that the hardest hit Member States commit to reform.
“Support for recovery must ensure that all Member States are better prepared for the next crisis. A strong commitment to reforms and the fiscal framework is essential to promote potential growth, “they emphasize.
This emergency fund, they point out, should support state efforts to carry out “National reforms and strengthening the single market”.
In addition to future reforms, all four countries suggest that the fund be linked to compliance with European values and the rule of law and that spending be protected from possible fraud.
Unlike the proposal made last Monday by Germany and France, this fund proposed by the frugalists would be in the form of loans, and not a “donation”. The loan, these four countries point out, would be made «on favorable terms for the benefit of the country that needs itwhile limiting risk to all Member States and offering strong incentives “, while stressing that this fund should” ensure “that countries are better prepared for the next crisis.
The President of the European Commission (EC), Ursula von der Leyen, has been in favor of the fact that the fund is disbursed through a “balance” between loans and transfers, while the European Parliament advocates that it be done “mostly” through transfers that do not have to be returned.