An alternative to Merkel-Macron paper

Austria’s Chancellor and his counterparts from the Netherlands, Sweden and Denmark are presenting an alternative to the German Chancellor’s and French President’s reconstruction plans.

Has a different financing idea: Sebastian Kurz

Dhe goal of Chancellor Angela Merkel (CDU) and French President Emmanuel Macron was clear when they presented their plan for a 500 billion reconstruction fund on Monday evening: They wanted to give Commission President Ursula von der Leyen a tailwind for her proposal for “reconstruction” the corona crisis, which she wants to present next Wednesday – much to the displeasure of the Austrian Chancellor Sebastian Kurz, who made it clear immediately after the press conference that at least Austria and the Netherlands will not support the Franco-German initiative.

On Saturday morning Austria, the Netherlands, Sweden and Denmark presented a two-page counter-draft – and it clearly has only one goal: headwind for von der Leyen.

The President of the Commission wants a large part, Merkel and Macron want to allocate 100 percent of the funds from the fund as non-repayable grants. Austria and the other three “frugal” countries affirm that they are not ready for this. The member states should get loans that they have to repay.

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Countries like Italy or Spain would only benefit from the fund insofar as they receive cheaper loans than they could otherwise get on the financial markets. But that’s not all. Merkel and Macron have emphasized that the fund should be limited in time. The “thrifty four” want to give it a kind of expiry date after two years.

At most, there is agreement between the two sides that the Commission should raise the money for the fund on the financial markets and that the granting of aid should be linked to constitutional principles and reform commitments, even if Austria, the Netherlands, Sweden and Denmark are also in this Point are stricter. The four countries do not mention in their paper how much money the fund should be provided with. According to their ideas, it should supplement the EU budget from 2021 to 2027 and the already decided “emergency aid” of 540 billion euros.

Even with the multiannual EU budget, the “thrifty four” are sticking to their previous line. “Scope for Covid-19-related expenses can be achieved through savings elsewhere,” says the paper. The four countries also continue to demand discounts on their household contributions.

In response to the Corona crisis, however, they are in favor of bringing forward spending in order to get the economy going again. The paper was originally announced for Friday noon. The coordination between the participating capitals had been delayed again and again.