Four European countries presented on Saturday their own stimulus package to help the European Union overcome the crisis caused by the coronavirus pandemic, reaffirming their rejection of any mechanism for pooling European debt.
The Netherlands, Austria, Denmark and Sweden – known as the four “frugals” – seek emergency aid for severely affected countries in the form of one-time loans on favorable terms to be provided in both years, according to a proposal published by the office of Austrian Chancellor Sebastian Kurz.
In addition, the money loaned must be “directed towards activities that contribute most to recovery, such as research and innovation, strengthening the health sector and a green transition”, according to the proposal.
French President Emmanuel Macron and German Chancellor Angela Merkel put on the table Monday a 500 billion euro plan to revive an economy damaged by the Covid-19 pandemic, via an unprecedented debt pooling mechanism European.
The fact that Germany subscribed to the idea of a jointly issued debt was seen as a decisive turning point in European construction.
The “frugal four” for their part continue to reject any mutualisation of debt – a process which, according to them, would allow the least disciplined and weakest European economies to benefit unduly from cheaper financing thanks to the stronger ones of the North.
In return for the aid granted, the countries concerned should make a “firm commitment” to implement far-reaching reforms and to respect the budgetary framework imposed.
The four countries also declare that it will be necessary to “protect expenditure against fraud” by closely involving European prosecutors and those responsible for fighting corruption.
The proposal rejects the prospect of any “significant increase” in the EU budget, as envisaged by the Macron-Merkel plan.
Instead, she argues that the EU budget should be “modernized” and that savings could be made “by redefining priorities in the areas least likely to contribute to recovery”.
On the other hand, the expenses linked to Covid-19 could be privileged or temporarily increased. Given the gloomy economic forecasts for this year, “additional funds for the EU, however they are funded, will weigh even more heavily on national budgets”, according to the four countries.
The European Commission is due to present its own plan next week to stimulate economic recovery from the crisis.
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