Ratas opposes finance minister on €500-billion EU COVID-19 recovery plan

Prime Minister Jüri Ratas addressing the Riigikogu.
Prime Minister Jüri Ratas addressing the Riigikogu. Source: ERR

A plan sponsored by French President Emmanuel Macron and German Chancellor Angela Merkel to borrow €500 billion from the global financial markets to help the EU countries and industries hit hardest by the coronavirus pandemic is a sound decision, Prime Minister Jüri Ratas (Center) says. This points to a government split on the issue, since finance minister Martin Helme (EKRE) has already opposed the plan, with foreign minister Urmas Reinsalu (Isamaa) expressing reservations as well.

"I think the proposal made by the German Chancellor and the French President is definitely a step in the right direction," Ratas told ERR Tuesday.

Four EU nations, the Netherlands, Austria, Sweden and Denmark, have opposed the plan so far, arguing that loans to EU countries hit hardest by the pandemic would be preferable to debt pooling in this way.

Ratas rejected this, however.

"It is true that Denmark, Sweden, Austria and the Netherlands who see say that only loans should be used. Estonia certainly cannot go along with that," Ratas said.

As to whether those countries most affected – principally southern European states like Italy and Spain – would be able to receive funding with no requirement of repaying it later, Ratas said that these principles had not been hammered out yet.

"We have to wait for tomorrow's (Wednesday - ed.) proposal from the European Commission, then the [European] Council will start discussing this issue. Today was the first indication that the council may also meet face-to-face in the second half of June. I think this is very reasonable."

Ratas' coalition partner, Minister of Finance Martin Helme (EKRE) has said he not only did no support the plan in essence, but as also annoyed by how the plan had been presented. 

MP Aivar Kokk (Isamaa) chairman of the Riigikogu's Finance Committee, opposes the idea too.

Foreign Minister Urmas Reinsalu (Isamaa) said Monday night that he agrees with former Bank of Estonia president Ardo Hansson, who put Estonia's proportion of the potential repayment at around €1 billion, a figure he said was no small sum for Estonia.

German Chancellor Angela Merkel and French President Emmanuel Macron on May 18 proposed the creation of a recovery fund worth €500 billion that would help the EU countries and industries hit hardest by the coronavirus pandemic. "The EU must act together, the nation state has no chance if it acts on its own," Merkel said in a joint online press conference with Macron. "This is the biggest challenge in the history of the EU."

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Editor: Andrew Whyte

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