The EU’s 750 billion-euro Recovery Plan (big money grab with many strings attached) splits CEE states.

The EU’s 750 billion-euro Recovery Plan (big money grab with many strings attached) splits CEE states.

The EU’s 750 billion-euro Recovery Plan (big money grab with many strings attached) splits CEE states.

* The V4 Report stands squarely with Hungary and the Czech Republic on this one, while deeply disappointed by the initial ‘over-the-top’ reactions of both Poland and Slovakia.

For the first time, the EU Commission would borrow the money on financial markets in an attempt to mutualize debt. And so it begins…Look out! 😳

Is it now all just about how much money one can grab from the cookie jar, regardless of the long term consequences and strings attached?

In our opinion, there is much more at stake than just which states are the biggest ‘money winners’ here. We found some of the reactions rather awkward and embarrassing.

FYI: Our comments come before the planned meeting of the V4 on Thursday to discuss their differences, so things could change, especially when Poland fully realizes that the EU Commission desires to have these funds tied to its very vague and political interpretation of the “rule of law”.

In Vera Jourova we trust? 🤨

** Viktor Orban called the plan “absurd and perverse”. Not only is he suspicious of ‘debt mutualisation’ but also of the shift towards greater EU integration. Orban seems to understand the long term stakes involved, specifically the drive to expand the scope and power of Brussels.

However, he is not the only one. Whatever one may think of Czech PM Andrej Babis on other matters, he has come out the strongest against this plan.

“These conditions are absolutely unacceptable for us,” Babis declared.

“They reward EU members with high unemployment and penalise fiscally disciplined EU member states with a low unemployment rate,” he said. “This would put us at a great disadvantage.”

He is correct, while other countries like Romania gleefully hold out their hands. However, Babis gets even better. Czech government officials, speaking on condition of anonymity, said Babis’s objections were not only economic. Babis is worried, they said, about the power being vested in Brussels, taking the EU closer to a shared budget and central government.

Right on Babis! Again, the V4 Report has had issues with Babis, but this is strong and takes into account the huge amount of power being vested in Brussels and the drive towards EU federalism.

Of course, Guy Verhofstadt will not be happy with the response from his fellow Renew Europe member, but then again, Verhofstadt could care less about the Czech Republic or any ‘nation state’ for that matter.

*** It does not happen often, but the Czechs and Hungarians may also find themselves in an alliance with Austria, Denmark, Sweden and the Netherlands in this fight. The frugal four, especially Austria, have voiced strong concerns over this massive debt structure.

**** While the V4 Report is a strong supporter of President Duda, we were somewhat shocked by his enthusiasm for the Merkel-Macron plan, which is the driving force behind the Commission’s proposal.

“Poland persuaded Europe to have an ambitious budget. And we have a success!” Polish President Andrzej Duda tweeted in his first reaction.

C’mon, success? Enough with the drama. Macron and Merkel did not need any persuasion on this. Moreover, is the Polish government really for a more ambitious EU, one that places the principle of EU money conditioned on respect for the bloc’s founding principles in terms of the rule of law?

From the recovery fund alone, Poland is indeed set to reap over 37 billion euros in grants and another 26.8 billion in loans. One cannot blame Poland for being excited, but neither can one blame another state for objecting to being put on the debt hook to fund the wishes of another.

Moreover, how does Poland feel about the expansion of power being shifted towards Brussels or the funds being conditional on the ‘rule of law’ demands of Jourova and the EU Commission?

Bulgaria is also concerned about this conditionality. “This is not an easy topic for Bulgaria,” said Alexandrina Ginkova, a journalist on the world desk of Dnevnik.bg.

“It will be interesting to see whether the evaluations will eventually influence the distribution of EU funds.”

***** There were others holding their hands wide open too, including Slovakia, Croatia and Romania.

From the recovery plan and the budget, Romania stands to reap a whopping 100 billion euros, a sum the country’s European Funds minister, Marcel Bolos, called “impressive”. That’s one way to describe it, at least for Romania, although Austria probably has a different take.

“From the Romanian point of view … you can’t be against this [recovery] plan,” said Siegfried Muresan, a Romanian MEP and vice-chair of the European People’s Party bloc.

“Its principles are healthy and it is good for Romania to support it,” Muresan told BIRN in a telephone interview.

Of course it is a ‘healthy’ windfall for Romania, but it does not mean that Czechs or Hungarians should blindly go along with this scheme to please some EPP plebe from Romania.

Quite frankly, we find many of these reactions insulting, but the real problem is not a country which accepts the generous handout of another’s debt, but an overgrown superstate in Brussels with the power to make it happen.

We shall see but the plan does require the unanimous support of all 27 members of the bloc, and this will not fly as is.

However, knowing the EU, one can expect a dizzying array of creative changes, even some heavy creative accounting, in order to get it through.

In the end, we fear enough sweeteners will be added to push it through in some form…which means another step towards a federal EU.

https://balkaninsight.com/2020/06/10/eu-recovery-plan-splits-cee-raises-absorption-capacity-questions/