October 28, 2020

The reasons why the four “frugal” countries reject Sánchez’s proposals


MADRID

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The heads of state of the European Union (EU) meet during this Friday and Saturday in Brussels to try to reach an agreement on the reconstruction fund to stop the coronavirus pandemic. Reaching a pact will be complicated by the divisions between the countries of the north, which are demanding cuts, compared to the block made up of Spain or Italy. Below, we review the keys to the negotiations that begin today.

What is the proposed Reconstruction Fund for Europe to alleviate the effects of the pandemic?

He Reconstruction extraordinary fund amounts to a total of 750,000 million, but before it must be approved by all the countries of the European Union. Specifically, Spain will be able to access these grants on the condition of undertaking stalled reforms in recent years, such as the pension system or the labor market. In addition to the fund, the leaders are called to agree on the community budget (MFF, for its acronym in English) for the period 2021-2027, the amount of which the northern partners also want to cut.

Why do the so-called “frugal” countries reject Sánchez’s proposals?

Upon arrival at the summit this Friday, Dutch Prime Minister Mark Rutte has urged “concrete reforms” as a condition of negotiating and supporting a post-pandemic reconstruction fund based on “subsidies.” The so-called four “frugal” for their greater control over spending are the Netherlands, Denmark, Sweden and Austria and share with Finland the opinion that the reconstruction fund should be less than the 750,000 million proposed by Brussels. They also question that the majority (of this amount, a total of 500,000 million, reach the countries as direct transfers.

The movement is led by the Netherlands, which not only complains about having to pay the “gifts” to Spain and Italy, but wants very strict conditions to be set for the countries that receive the funds. “Solidarity is really important, yes, from the countries that have the most in their own budget to countries that are less capable of reversing demand, but you have to do everything possible to be able to solve the crisis yourself next time. These are reforms in the labor market, in pensions, etc., “added Rutte upon arrival at the summit.

What is the position defended by the Spanish Government?

Pedro Sánchez insists on the need for most of the fund spread in the form of a direct grant to accelerate recovery and help the most affected countries -Among which is Spain. The President of the Spanish Government wants it to be distributed mainly in the form of direct subsidies and does not want harsh conditions or vetoes from other Member States.

Are the European leaders going to be able to close a deal?

The German chancellor herself, Angela Merkel, has predicted today that the negotiations will either be “very difficult” since the divergences between the various positions “remain very large”. “We came to the negotiations with a lot of momentum, but I must say that the differences are still very large and I cannot predict whether this time we will have a result,” stressed the chancellor upon her arrival at the Council, although she stressed that the latter would be “what is desirable” .

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