ZCZC
BCN-05
VIRUS-EU-ECONOMY-AUSTRIA-POLITICS
EU ‘frugal four’ present own proposal for virus aid
VIENNA, May 23, 2020 (BSS/AFP) – Four EU countries dubbing themselves the
“frugal four” presented their own proposal Saturday for post-coronavirus
economic recovery, restating their rejection of any jointly-issued debt
instruments.
The group, comprising Austria, the Netherlands, Denmark and Sweden, wants
emergency help for badly affected countries to take the form of one-off loans
which must be agreed within two years, according to a proposal published by
the office of Austrian Chancellor Sebastian Kurz.
In addition, the money lent must be “directed towards activities that
contribute most to the recovery such as research and innovation, enhanced
resilience in the health sector and ensuring a green transition,” the proposal
says.
Earlier this week French President Emmanuel Macron and German Chancellor
Angela Merkel proposed a 500-billion-euro ($546 billion) fund to mend an
economy devastated by the pandemic.
The fact that Germany signed up to a plan involving jointly-issued debt was
seen as a historic turning point for the European Union.
But the so-called “frugal four” continue to insist there must be no
“mutualisation of debt” — a process they believe would let the less
disciplined and weaker EU economies get an undue benefit of cheaper funding on
the back of their stronger northern peers.
The proposal published Saturday says that support for economic recovery
should be accompanied by “a strong commitment to reforms and the fiscal
framework” — a key obligation for recipient states.
The four countries also say it will be necessary to “protect spending from
fraud” by closely involving European prosecutors and anti-corruption
officials.
The proposal rejects the prospect of any “significant increases” to the
EU’s budget, as envisaged by the Macron-Merkel plan to fund the recovery
programme.
BSS/AFP/MMA/1555HRS