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‘Frugal Four’ present counter-plan to Macron-Merkel EU recovery scheme

May 25, 2020 | News

(25 May 2020) – The “Frugal Four” (Austria, Denmark, the Netherlands and Sweden) presented their own draft for an EU recovery fund in a ‘non-paper’ sent to the EU capitals on 23 May. The most important point: aid money must be repaid.

Frugal 4
© Bloomberg

The new draft is very similar to the Merkel-Macron plan in its basic features: the “Frugal Four” also want a common fund from which aid money should go to economic segments that are particularly affected by the coronavirus crisis.

Investments would be funnelled into research, innovation and health, as well as the green transformation and digital agenda. However, unlike the Merkel-Macron plan, the money must be repayable.

Under the principle “Loans for Loans”, funds from the capital markets are to be redistributed as loans, which should be cheap but not free of charge. That is because the “Frugal Four” do not want to see debt mutualised.

The ball is now in the court of the Commission. Since the last EU summit at the end of April, the EU executive has been working on a recovery fund concept that it will present on Wednesday (27 May), together with its new EU budget proposal. (EurActiv)

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