PM Mark Rutte. Photo by EPA-EFE/PHILIPP GUELLANDThe Netherlands drew backlash recently, after they rejected the idea of “Coronabonds”, bonds composed of loans from all EU countries as a form of joint debt.
Dutch government believes issuing joint debt is a step too far, which will take years to negotiate.
Besides Holland, some other Northern member states including Germany, Austria and Finland also have reservations about this idea.
Dutch Finance Minister said Southern countries like Italy and Spain must be “investigated” for not having enough fiscal power to deal with a crisis.
These comments sparked criticism from Southerners. Spanish government called these remarks “senseless” and “repugnant”. In Italy a group of politicians wrote an open letter and criticized what they called Netherland’s lack of solidarity.
“The Dutch attitude is an example of a lack of ethics and solidarity in every respect.” Wrote the politicians, led by Member of European Parliament, Carlo Calenda.
Even at home, some Dutch politicians and Economists also denounced Prime Minister, Mark Rutte and his Finance Minister’s stance on Coronabonds.
Former Dutch Central Bank leader Nout Wellink was also critical of the Dutch approach, saying that the crisis and the debt needed to be “a shared responsibility.” He said, “the Netherlands will no longer be a rich country in the North, if the South falls.”
On the other hand, some argue that The Netherlands is one of few EU countries that has respected the bloc’s fiscal rules in recent times. The country, which is famous for its fiscally conservative approach, has a current account surplus.
Consequently, after all the heat and criticism, the Dutch government now announced that it wants to give a “gift”, as a form of fund, to other European countries that are struggling with the coronavirus outbreak.
On Wednesday, The Netherlands unveiled a plan for a “coronafund,” a common basket of cash filled with contributions from member states. “These are not loans or guarantees, but gifts to help people in need,” Dutch Prime Minister Mark Rutte told lawmakers.
He also said he prefers setting up a new support fund rather than having countries using the European Stability Mechanism (ESM).
Meanwhile, Italy is still among the countries hit the hardest by this virus. The total number of infections rose to 110,574 and the death toll to 13,155.
Italy’s Prime Minister Giuseppe Conte said in an interview with the Telegraph that the relationship between Italy and the Netherlands has not deteriorated due to the insitial lack of support to save the Italian economy, “The friendship with the Dutch people remains in tact.”
But he also gave a message to his Dutch counterpart, Prime Minister Mark Rutte : “Dear Mark, if correct answers are too late, they can be useless. We must avoid saying that we have finally found the therapy, but then discover that the patient is dead.”
Maryam Rahmani