Especially the Dutch stubbornness persists

There are exactly two minutes between Thursday night’s tweets, and a world of difference.

At 10:14 pm, Roberto Gualtieri reports with satisfaction that Rome has taken loot in the longstanding negotiations on European emergency aid. The strict conditions defended by the Netherlands „are off the table“The Italian finance minister said. At 10:16 PM, Wopke Hoekstra claims the exact opposite. Emergency aid is coming, but„that requires conditions“The Dutch Finance Minister said.

A laboriously negotiated agreement that is open to many interpretations. Everyone wins, no one loses face. It can hardly be more European.

However, The Hague will also look back with concern in the few weeks when the Netherlands came under intense fire. The fight always precedes a euro zone deal, but the fact that the Netherlands this time alienated everyone, even lost Berlin’s traditional ally, is remarkable; Germany grew to France. The main European newspapers discussed in detail the Dutch political context that had led to such an unwavering attitude. The Netherlands needs allies in the main negotiations to come, on climate, the EU budget and Brexit. And as you brush the shards, you will often wonder, was it worth it?

Also read: Even Berlin is upset about the Dutch attitude.

During the EU’s three-day consultations, the European Stability Mechanism (ESM) was the main division. Anyone wanting loans from this emergency fund established after the euro crisis would normally have to accept rigorous reforms. The Dutch requirement to adhere to this principle in the crown crisis was also unsustainable after three days of discussions. Hoekstra had to let go of a spring, but it also brought something: ESM loans are in principle only available to finance “care, cure and prevention”, which is directly or indirectly related to the virus.

Open ends

There are more open ends in the chord. For example, a “recovery fund” has been announced with which the European economy can be restarted as soon as possible. But not much more is known: what will this help be like? Where does the money come from? Now that the ministers have finished speaking, the text goes to the heads of government. They must create clarity. Starting April 23. Friday unveiled that a new EU summit will be held. The battle is not over yet.

The announced size of the package, around 500 billion euros, sounds substantial, but contrasts with the 1,173 billion that Germany allocates to itself. Economists from various European think tanks are critical: The package is too late, too limited, and not close to the kind of support that the United States federal government can mobilize, for example.

At the same time, the deal concluded on Thursday night is special, because there is immediately a lot of attention for the impending social damage. During the 2008 financial crisis, which would culminate in the euro crisis, the emphasis in Europe was on limiting budget deficits and sovereign debt, and less on social butchery, especially in southern Europe, with more suicides and spectacular unemployment massive youthful. This time he seems to realize that the EU cannot afford more lost generations. For example, there will be a temporary EU scheme of € 100 billion to prevent mass layoffs, for example through short-term work.

The message: Europe is not only for banks, but also for citizens. The idea behind this is that even the wealthiest countries in the euro will not benefit if other countries fall further behind as a result of the crown crisis. If you let the differences in prosperity widen, then the internal market and the single currency will also break down.

Permanent unemployment fund

“We need to make sure we grow together, not apart,” Euro Group President Mário Centeno, the group of finance ministers, said Thursday night. The Netherlands are concerned: Hoekstra stipulated on Thursday that the scheme should not be the prelude to a permanent European unemployment fund.

Also special: the speed with which Europe acts. In this crisis many times faster than ten years ago, although the controversy of the last days may give a different impression. Economic-financial rules are normally sacred in the European Union, but these rules have been deactivated in rotary shipping for the last month and a half. Member States have already agreed not to adhere to budgetary rules for the moment, nor to worry about giving state aid. Export regulations have been tightened to prevent crucial protective equipment from disappearing from Europe. The EU budget was squeezed to make emergency funds available.

The European Central Bank’s offensive was even more impressive. The ECB also took action during the credit crisis, but it was a long time before then-President Mario Draghi with his famous “Whatever is needed” The turmoil in the capital markets calmed down. Now, the ECB acted quickly: On March 12, it launched an unprecedented substantial injection of money into banks, which for the time being removed the worst of the turmoil.

Also read this interview with Wopke Hoekstra: “It is crystal clear, it is not about Eurobonds.”

Bulky truck

The EU has often been described as a bulky tank truck, which can only be adjusted very slowly. However, less than six weeks after the crown pandemic began to spread to Europe, steps had been taken that were previously unthinkable and even beyond discussion. What follows, according to economists, that the greatest economic crisis in a century may be underway? On Thursday, euro area countries agreed to keep the possibility of ‘new financial instruments’ open. As regards southern Europe and France, this also includes ‘Eurobonds’, the joint contracting of debts to spread risks. Germany and the Netherlands are stopping, but the discussion on this will not be muted, especially if the crisis turns out to be deeper than expected.

Fierce discussions preceded the agreement. The Netherlands and Italy in particular came into direct opposition. In both countries, the government feels the heat of the euro-critical populist parties on its neck. Hoekstra and Prime Minister Rutte fear the old reproach, known for the euro crisis, that they are giving away Dutch tax money. In Italy, opposition leader Matteo Salvini has been campaigning for months with the specter that the country must submit to European demands in exchange for ESM support.

Therefore, the ministers of both countries had a great interest in presenting the agreement as a “victory”. But the Dutch stubbornness is what will mainly remain. On Tuesday, an evening video conference lasted for sixteen hours and mainly annoyed Hoekstra. A missed opportunity sounds in Brussels, especially since almost no changes have been made to the final agreement.