Austrians, Danes, Dutch oppose grant-based recovery fund

May 20, 2020 / By mobanmarket

Austrians, Danes, Dutch oppose grant-based recovery fund

The three countries’ finance ministers voiced their opposition during an Ecofin videoconference.

Austria, Denmark and the Netherlands today pushed back against the Franco-German pitch for a €500 billion recovery fund that would offer grants to EU countries hit by the pandemic.

The three countries’ finance ministers voiced their opposition during an Ecofin videoconference, three treasury officials attending the virtual meeting told POLITICO, less than 24 hours after Paris and Berlin unveiled their joint-initiative.

The ministers reaffirmed their national preferences for a loan-based fund that EU governments can borrow from to kick start their economies, threatening another political battle between the North and South over EU solidarity.

“We stand ready to provide the EU with further guarantees so it can provide more repayable loans to member states and businesses,” Austria’s Gernot Blümel wrote in an email to POLITICO ahead of the videocoference. “What we cannot support — but what DE and FR propose — is that the EU borrows on the markets to finance non-repayable grants.”

Swedish Finance Minister Magdalena Andersson, usually an outspoken critic of a grant-based fund, said she would await the European Commission’s proposal on May 27 before commenting further.

The four policymakers also stressed EU governments would need to reform their economies along with the recovery. But they did say they were open to discuss the initiative, which will need unanimity to survive the Brussels’ legislative machine.