“Frugal four” nations, who are opposing the idea of 750 billion pounds of post coronavirus recovery fund planned by the European Commission, were handed an olive branch by Angela Merkel. She said that the EU countries must also be willing to work on their economies and reform them to be more future-proof.
The Germany Chancellor was in a joint press conference with President of France, Emmanuel Macron at Meseberg, outside Berlin. Mr. Macron was the first foreign leader that Ms. Merkel met in person since the pandemic led lockdown was imposed in the countries. This indicates as strong France-Germany relationship that has grown positively during the coronavirus pandemic.
During the conference Ms. Merkel expressed her confidence that European Union leaders would positively reach to an agreement on the recovery fund for post coronavirus pandemic in bloc. She also said that the new budget for union to be decided in a summit to be held in July was a positively hopeful scenario, but it was still a “long way to go”.
Since the pandemic hit globally with economies coming shattering down, Macron and Merkel have been at the forefront trying to rescue EU from what is believed to the worst recession in history, hitting European economy and leading to a social malfunctioning. In mid-May the two prominent leaders came up with an idea of “recovery fund” that would help the bloc bounce back from the economic crisis. The plan envisioned money borrowing from international capital markets by the European commission and allocating it to the worst affected European countries in the form of cash grants. This has met with opposition and disagreements from EU leaders.
The European Commission later made the recovery fund amount to 750 billion pounds, out of which 500 billion pounds would be allocated to countries in form of grants. EU countries are of divided ideologies over this plan. Size of fund, grant and loan amount, operational period and repayment terms are some of the disagreements revolving around recovery fund plan.
The ‘frugal four’ – Sweden, Netherlands, Austria and Denmark – are of the belief that amount of fund granted to countries must be less and primarily it must be in form of cash loans, with strings attached.
Merkel indicated that numerous talks were underway by the European Council President, Charles Michel, and an agreement must be reached by the summit date which is July 17-18. She further said that if some countries emerged stronger than others post the pandemic, it would “call into question the cohesion and convergence of the EU, and the functioning of the single market.”
Indirectly referring to the ‘frugal four’ Merkel expressed sympathy towards their disagreements saying “Every country must look at its own domestic policies and make them more future-proof.”
Macron too agreed that though the recovery fund is all about solidarity, each country must look into its own interests on priority. In the conference Mr. Macron further said, “We have reached a moment of truth for Europe. With this resolute Franco-German commitment, we can turn it into a moment of success.”