Netherlands wants EU stimulus loans, Germany favors grants
BERLIN / AMSTERDAM (Reuters) – The Netherlands insists that the planned European Recovery Fund should provide financial assistance to member states affected by the virus only in the form of loans rather than grants that do not have to be reimbursed, Dutch Prime Minister Mark Rutte said on Tuesday.
“We need an emergency stimulus fund to stimulate the recovery. We think it should be loans, without any debt pooling, ”Rutte told reporters during a joint video conference with Armin Laschet, prime minister of Germany’s most populous state, North Rhine- Westphalia.
Laschet said he supports a € 500 billion proposal put forward by German Chancellor Angela Merkel and French President Emmanuel Macron for the fund intended to provide grants to European countries most affected by the coronavirus pandemic.
“The Netherlands and Germany will come out stronger only if Spain, Portugal, France, Greece also have a chance to recover,” Laschet said, adding that it was now in the hands of the leaders. Europeans to decide on the right path for this.
The European Commission will release a new proposal for a long-term EU budget and coronavirus stimulus fund on Wednesday to help bloc economies come out of recession.
Both measures are controversial because they involve transfers of wealth across the 27-nation bloc, and views differ widely on how this should happen. The stimulus package also creates new loopholes as it involves financing through debt issued on behalf of the bloc.
Merkel and Macron have proposed a € 500 billion stimulus fund that would provide grants to regions and sectors of the European Union hardest hit by the coronavirus pandemic.
But Austria, Sweden, Denmark and the Netherlands – also known as the “Frugal Four” – have declared their opposition to the plan and called for an approach based on loans instead of grants.
Reporting by Michael Nienaber in Berlin and Bart Meijer in Amsterdam, editing by Emma Thomasson and Pritha Sarkar