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Hardliners show hints of compromise on EU recovery fund

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Austria and the Netherlands, two of the so-called "frugal four" that have opposed a proposed EU coronavirus recovery package, showed signs they may be softening their stance on Thursday.

[BERLIN] Austria and the Netherlands, two of the so-called "frugal four" that have opposed a proposed EU coronavirus recovery package, showed signs they may be softening their stance on Thursday.

The 27 EU states' leaders meet in Brussels next week for a crunch summit aimed at agreeing the 750-billion euro (S$1.17 trillion) plan to tackle economic devastation wrought by the pandemic.

Austria, Denmark, the Netherlands and Sweden have said they want to rein in the spending, which is earmarked mainly for the hardest-hit poorer countries of southern Europe.

But Dutch Prime Minister Mark Rutte said Thursday he considered the proposed fund "very important," so long as the cash came with conditions attached.

"It also is very important that such a fund is implemented together with reforms so that all EU member states are also strong," Mr Rutte said ahead of evening talks with German Chancellor Angela Merkel in Berlin.

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Earlier Thursday, Austrian Chancellor Sebastian Kurz also suggested Austria could back the package if aid was tied to certain conditions, such as climate protection, willingness to reform and rule of law.

"We want to find a compromise... I'm glad if there is a quick solution," Mr Kurz said.

Together with Denmark, the Netherlands and Sweden, Austria had insisted that loans with tough conditions attached, rather than grants, should be the preferred method of rescue.

Other countries have argued that the plan misallocates the money, giving too much to eastern Europeans who were never on the front lines of the pandemic.

Dr Merkel on Wednesday urged EU countries to show solidarity and overcome deep divisions to approve the massive coronavirus recovery plan this summer.

Alexander Dobrindt, the parliamentary leader of the Bavarian CSU conservatives in Germany, on Thursday called on Mr Rutte to soften his stance on the non-repayable grants that make up 500 billion euros of the proposed fund.

Attaching certain conditions to the funds could act as a "bridge" to bring sceptical countries on board, Mr Dobrindt told the DPA news agency.

"I am relatively sure that even the so-called frugal four will not and will not want to evade such a logic," he said.

According to Friday's edition of the conservative German daily FAZ, Mr Rutte could be the final stumbling block for the recovery package.

"The head of the Dutch government finds himself isolated a week away from the European summit" after Mr Kurz "softened his stance on Thursday", the newspaper said.

"The last two countries in the frugal four, Denmark and Sweden, should not oppose Angela Merkel's call for a rapid agreement," it added.

AFP

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