"The frugal four" versus Merkel and Macron

Denmark, the Netherlands, Austria and Sweden are opposing the reconstruction plan put forward by Merkel and Macron, which includes debt mutualisation among EU states. On the weekend the four states presented a counter-proposal that puts a two-year limit on coronavirus emergency aid and foresees cheap loans rather than grants for the worst-hit states. Is this a more sensible plan?

Open/close all quotes
Handelsblatt (DE) /

Stop the march into the debt union

In Germany in particular we should be grateful to the frugal four, the Handelsblatt writes:

“Here, too, no one wants to rush headlong into a debt union. The clever left-wing economists like to point out that Germany is allegedly liable for 'only' around a quarter of the debt. That's complete nonsense of course. It is Germany's creditworthiness that the financial markets count on. That was the case with the introduction of the euro and the establishment of the European Stability Fund during the debt crisis. But if doubts arise about Germany's creditworthiness, the debt sustainability of all Europe is at risk. This should also be publicly acknowledged by the proponents of euro bonds.”

Jutarnji list (HR) /

An agreement will be reached

The German-French proposal will go through in the end, Jutarnji list believes:

“This is a major challenge for the EU. In this most serious crisis to date, not only will money be urgently needed but the solidarity and unity of the European Union are once more being called into question. And yet the optimism that a compromise will be reached is greater now. It seems clear that no one wants to take responsibility for new divisions within the EU at a time when we need to act together, because no one can overcome this crisis alone. The fact that Germany, a country that had so far been in the 'frugal' group, has supported the proposal gives us cause to hope that an agreement between the member states will be reached.”

LRT (LT) /

Balance between solidarity and self-interest

This is just another phase in the EU's constant struggle for consensus, Linas Kojala, head of the Vilnius Eastern Europe Studies Center, points out in Lrt:

“Europe continues to seek a balance between solidarity, which is necessary to maintain unity, and reluctance to finance this solidarity by digging too deep in one's own pocket. Some of the proposals are very ambitious, but past experiences with crises show that the EU does not change significantly even in the face of immense challenges. Above all, it is still a Union of 27 states with at least as many interests, in which orders are not given, and instead the complicated search for a common consensus dominates. And when a consensus is needed in such a large group, the result is usually not very ambitious.”

France Inter (FR) /

A belated victory for Thatcherism?

The four countries are making the mistake of transferring the dictates of their national fiscal policies to the EU, columnist Pierre Haski comments on the website of radio station France Inter:

“Their view of the European project is largely defined by accounting, adopting the UK's point of view before Brexit. Remember Margaret Thatcher and her 'I want my money back'! Of course you can't accuse a well-managed country of being frugal. ... Nevertheless, one should not reduce Europe to a simple economic area. … In the coming days we'll see whether the 27 reach a compromise, as the French president hopes, or whether Maggie Thatcher scores a posthumous victory - at the risk of torpedoing Europe in the long term.”

Die Presse (AT) /

Help only in exchange for controls

By contrast the daily Die Presse criticises that with Merkel and Macron's plan the EU is moving further towards a transfer union:

“A group of four states is resisting the European M & M royal couple and has presented a counter paper. ... In the [German magazine] Der Spiegel the argument was made that the four countries with their export surpluses would be obliged to pay back past profits to other countries that had previously imported more. This is a line of argmentation that a certain president called Trump conjured up in his trade war against Europe. It's absurd. In the end, for the sake of consensus there will be a compromise, a combination of subsidies ('grants') and credits. ... If help is provided now, it must be checked at the same time that long-forgotten Maastricht criteria and other parameters are respected at some point.”

Le Soir (BE) /

Northern mercantilism jeopardising monetary union

The greatest threat for the monetary union isn't an "overgenerous" budgetary policy in Southern Europe but the nationally oriented economic policy of Northern European countries, Le Soir believes:

“One thing is indisputable: not all EU member states can imitate Germany, even if they accept years of austerity and restrained wage policies - and a stagnant economy like the one Italy has had for the past 20 years. So there are only two solutions. Either Germany and the 'four thrifty' countries abandon their mercantilist obsession and admit that since Europe is not a small, open economy, its growth and prosperity cannot be based on competitiveness and foreign trade, or the monetary union will become increasingly dysfunctional until the day when some countries decide to leave it.”