EU divided: Spain and Italy dealt devastating warning from Dutch PM – bloc split

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Mr Rutte said he was willing to support the bloc’s €750 billion coronavirus recovery fund, but not without significant changes to proposals put forward by the European Commission. European leaders are set to gather in Brussels on July 17 for their first face-to-face showdown talks over the controversial packages. Mr Rutte claimed negotiations will be “tough” as national interests lay siege to the creation of an EU-wide bailout package.

“I think that the Commission’s proposal contains room to continue the discussion,” he said.

“Without a doubt there are differences. The negotiation will be tough, it will take some time, but a compromise is possible.”

Under Commission President Ursula von der Leyen’s blueprint, eurocrats would borrow €750 billion on international markets before distributing €500 billion in grants and €250 billion in loans to pandemic-stricken industries and regions across the bloc.

Spain and Italy, the EU’s hardest-hit countries by the pandemic, are due to receive the most funds from the new war chest. 

Mr Rutte supports the creation of a recovery fund but has urged his EU colleagues to reconsider the balance between loans and grants.

The Dutch prime minister has suggested that aid should be dished out in the form of low-cost loans.

He said: “Holland understands and supports the appeal for solidarity. But responsibility also means that we have to take our own.

“We owe solidarity to the countries that have been most affected by the pandemic, knowing however that we too have been seriously affected.

“This means that states which need and deserve help must also ensure that they are able to deal with such crises in a resilient way in the future. And I want to add that I admire what Giuseppe Conte does, trying to launch a package of reforms aimed at increasing Italy’s productivity and competitiveness, including unpopular measures. It’s a good start and I hope he continues. Because it is crucial that Italy will be able to respond to a crisis on its own next time.”

He added: “A loan system is much more logical. Those are also aids. And from the Commission’s analysis, we know that the sustainability of Italy and Spain’s debt will not be diminished by new loans.

“For this reason our position is that the help must be made of loans and not of contributions. But we also insist that we focus on increasing the competitiveness and resilience of the countries that receive them. “

At the summit, Mr Rutte confirmed he would oppose grants and would not be open to concessions.

“We want them to be just loans,” he said.

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Asked whether he would be open to accepting concessions in other areas, he replied: “This is your interpretation, and that’s fine. But it’s not our position.”

Mr Rutte is the most senior leader of the so-called “frugal four” nations.

Austria, Sweden, Denmark and the Netherlands have all opposed the plans put forward by Mrs von der Leyen.

The fiscally conservative northern states would normally be joined by the UK at the negotiating table.

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But Mr Rutte doesn’t believe Brexit will diminish their influence when EU leaders lock horns at their crunch summit.

He said: “It is true that on many issues the United Kingdom was close to us. In particular in ensuring that the free trade system, open economy, internal market and free movement of capital worked and were defended.

“But it is not true that London was our only partner.

“There are issues on which Italy and the Netherlands are natural partners. With Conte, we are soulmates on the need to project the EU onto the international scene as a strong global player on an economic and political level.”

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