Position on Recovery Fund unchanged

Finland’s new finance minister Matti Vanhanen said yesterday (9 June) that he’d not seek to change the position of his government against the European Commission’s proposed Recovery Plan, which includes primarily grants. What’s the new timeline objective of eurozone members?

Together with Austria, the Netherlands, Sweden and Denmark, Finland has openly opposed the executive’s plan to help Eurozone countries recover from the pandemic. They all insist that loans should be granted in the form of rescue packages and not grants.

Another hot potato is the conditionality that will accompany the loans or grants. The so-called “Frugals” call for strict conditionality while Germany, France and Europe’s south back the executive’s idea that member states themselves should come up with their own reforms plan adjusted to the Commission’s semester recommendations.

Both Commissioners Paolo Gentiloni and Valdis Dombrovskis have said that the new Fund has nothing to do with the bailouts of the past.

EU sources have told EURACTIV that the objective now is to have in principle a deal on the Fund within July and in the best-case scenario, have a final agreement sealed by November, as it has to go through national parliaments, as well as the EU House.

In this case, the Fund’s money could already start being distributed in spring 2021.

Meanwhile, the Netherlands remains adamant that the scheme should be on a “loans for loans basis”, based on a clear repayment schedule.

To improve long-term economic strength and resilience, the government believes it is important that the necessary structural reforms are carried out in the member states and that investments help to sustainably strengthen the capacity for growth, in part through the realisation of green and digital ambitions, and thus lead to a sustainable recovery in employment,” a letter to the Dutch parliament reads. 

(Sarantis Michalopoulos | EURACTIV.com)

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