HAGUE, NETHERLANDS – 2020/03/23: Prime Minister Mark Rutte attends a press conference on COVID-19 outbreaks.
After much criticism, the Dutch government now wants to give a “gift” to other European countries struggling with the coronavirus outbreak, including Italy and Spain.
The corona virus has hit Europe hard, which has caused the major economies to stop completely. France, Germany, Italy and Spain ̵
The pandemic also shakes the foundations of the European Union – the political and economic group of 27 countries – by reopening an old divide between northern and southern countries.
The Netherlands revealed on Wednesday a plan for a “corona fund”, a common basket of cash filled with contributions from the member states. “These are not loans or guarantees, but gifts to help people in need,” Dutch Prime Minister Mark Rutte told lawmakers on Wednesday.
The Dutch proposal comes after the country refused the idea of issuing common European debt to mitigate the cost of the virus. The Dutch government wants to show solidarity with other EU countries, but it believes that issuance of common debt is a step too far, which will take years to negotiate. Lawmakers in Germany and Austria share a similar view.
The Dutch position angered southern European countries, which is for a bolder move to support all EU economies during the pandemic.
LISBON PORTUGAL – 2020/03/28: Praca do Comercio, formerly Terreiro do Paco, which is usually full of tourists, practically without people in an emergency.
Portuguese Prime Minister Antonio Costa thanked the Dutch Finance Minister for “dismissive” and “meaningless” comments, after he later said that Italy and Spain should be investigated for not having enough tax room to handle the crisis.
The Netherlands, with a current account surplus and a debt-to-GDP ratio below 60%, is one of the few EU countries that has recently respected the bloc’s tax rules. With its financially conservative strategy, the country took the lead of the “Hanseatic League” a few years ago. The informal group of northern EU countries has pushed back significant steps for integration into the euro area.
The Dutch plan for a “corona fund” comes as the whole region is competing to come up with new ideas on how to reduce the economic impact of the pandemic.
For example, France also wants a common EU fund to help with costs. Bruno Le Maire, the French finance minister, told the Financial Times on Wednesday that this fund would have a limit of five to ten years.
“Having a fund for, let’s say, five or ten years – with a limited time frame – and having the option of having joint debt but only within that fund, which may be more acceptable to other countries, can be a solution,” can Le Maire told the newspaper.
At a press conference on Thursday, Le Maire said the Dutch proposal was a “first step in the right direction.”
“Everyone is aware that there is a lack of solidarity between European countries and it is time to show our solidarity to face the crisis,” said the French CFO.
Eurozone finance ministers will have a video call Tuesday next week to discuss these proposals.
Italy extends lockdown
LIVORNO, ITALY – MARCH 29: A pizza chef prepares pizza while wearing a protective mask in his pizzeria closed to the public March 29, 2020 in Livorno, Italy. In Italy, the pizzerias are closed, but home delivery is allowed.
Meanwhile, Italy is still the hardest hit EU nation of the virus. There were 4,782 new cases and 727 deaths in 24 hours until Wednesday, according to information from the Italian authorities. This has led the total number of infections to 110,574 and the death toll to 13155.
Italian Prime Minister Giuseppe Conte said on Thursday that the government is preparing new measures to mitigate the effects of the crisis. He told Il Fatto Quotidiano that he intended to bring these to Parliament before the Easter weekend.
Italy has been in national lockdown since the beginning of March and this is expected to last at least until April 13.
Unemployed numbers in Spain
Data from Thursday morning showed that 898,822 workers have lost their jobs in Spain since the closure began on March 12.
The Spanish Ministry of Labor said that the sectors with the largest reductions in the labor force were construction and hospitality.
Spain’s death toll has reached 10,003 and so far there have been 110,238 confirmed cases, according to the latest figures revealed by the Spanish Ministry of Health.