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May 23, 2020The Recovery Fund must not "lead to any debt mutualisation", but be limited to "loans on favorable terms for the benefit of the Member States in need" in exchange for "a strong commitment to reform and the framework of tax rules ".This is the proposal put forward by the group of "4 frugal" - Austria, Holland, Denmark and Sweden - in a non-paper on the Recovery Fund and the EU budget 2021-2027, which the AGI came into possession of.
"We cannot give our agreement to any instrument or measure that leads to debt mutualisation or a significant increase in the EU budget," reads the document from Austria, Holland, Denmark and Sweden.
"Our goal is to provide temporary funding through the multiannual financial framework and to offer favorable loans to those who have been most severely affected by the crisis," reads the non-paper from Austria, Holland, Denmark and Sweden. The 4 frugal offer to establish an "Emergency Recovery Fund" with a duration limited to two years.
The Fund should not "lead to any debt mutualisation", but "provide" loans on favorable terms for the benefit of Member States in need, while limiting the risk of all Member States and providing healthy incentives ", reads in the Non-paper. According to the document, "support for recovery should ensure that all Member States are better prepared for the next crisis. A strong commitment to reforms and to the framework of tax rules is essential to promote potential growth. "
The four frugal also insist on respect for the rule of law and fundamental rights and the fight against fraud with EU funds. The resources of the Recovery Fund should be devoted to "activities that contribute most to recovery" such as research and innovation, strengthening the health sector, the green transition, the digital agenda. As regards the 2021-2027 budget (the multiannual financial framework), the 4 frugal insist on keeping the ceiling for expenses close to 1% of European GDP and getting a discount.
"Our position on the multiannual financial framework has not changed. We continue to ask for national contributions to be limited and remember that the logic in favor of corrections remains valid. "According to the 4 frugal, the expenditure linked to Covid-19" can be achieved through savings "in the EU budget by changing priorities" in sectors that and they are less likely to contribute to the recovery. "