EU member-states Austria, Sweden, Denmark and the Netherlands stated their opposition on Saturday to a French-German plan for a 500 billion euro coronavirus recovery fund that would issue grants, calling for a loans-based approach instead.
French President Emmanuel Macron and German Chancellor Angela Merkel made the surprise proposal on Monday to set up a fund that would offer grants to European Union regions and sectors hit hardest by the pandemic.
The European Commission is to present its own proposal for a recovery fund linked to the EU’s next long-term budget on May 27 and said it welcomed the initiative from France and Germany.
But the document from the “frugal four” said the Commission predicts member states will suffer an “unprecedented economic contraction in 2020, with only a partial recovery in 2021”.
“Additional funds for the EU, regardless of how they are financed, will strain national budgets even further,” they said.