with Reuters 01-06-2020

Austria opposes Europe’s current €750 billion plan to help economies recover from the coronavirus pandemic and wants to negotiate changes to the proposal, the country’s finance minister said on Saturday (30 May).

Under the plan, which must be approved by all bloc members, the EU’s executive Commission would borrow from the market and then disburse two-thirds of the funds in grants and the rest in loans to cushion the unprecedented economic slump expected this year due to lockdowns.

European Commission president, Ursula von der Leyen, proposed on Wednesday (27 May) an unprecedented stimulus of €750 billion, mostly through non-refundable grants, with governments having a crucial role in deciding how the money will be spent.

Much of the money would go to hard-hit Italy and Spain.

Finance Minister Gernot Blümel told broadcaster ORF that Austria was ready to negotiate amendments to make the European Commission’s package more acceptable, but said it would put too great a burden on Austrian taxpayers in its current form.

“Austria will not agree to this package,” Blümel said in the radio interview. “Why? Because the burden that it puts on the Austrian taxpayer would be simply too big. That’s why we need renewed talks, in which we’re ready to participate.”

Austria, one of a group of nations with the Netherlands, Sweden and Denmark known as the “frugal four”, has previously called the package a starting point for talks.

But Blümel’s comments on Saturday suggested that without changes, his country would reject the blueprint.

The recovery fund comes in addition to the EU’s long-term budget for 2021-27, which the Commission proposed to set at €1.1 trillion and needs unanimous backing of all EU states and the European Parliament.

“The commission’s proposal, together with the European budget and the reconstruction fund, would mean that Austria would have to contribute nearly 2% of its GDP,” Blümel said. “That would be twice as much as in the past. For us, that’s unacceptable.”