EU split: Outraged member states’ ‘petty squabbles’ over spending coronavirus revealed

This is because countries in the EU are split over whether to take universal action or act on a national level to deal with the economic consequences of the coronavirus. Professor Iain Begg of the London School of Economics highlighted how frugal nations like Germany have a different preferred approach to countries in southern Europe. He told “There is also a debate on the fiscal side on whether it should be at the member state level or the Europe collectively needs more of a federal budget to be used for stabilisation processes.

“Say that expression to anyone in Germany and they just roll their eyes and say: ‘No way are we going to allow a macroeconomic budget at European level because it will just be exploited by the feckless Southern Europeans.'”

He added that while Europe acknowledges it will have to come together in some way as a bloc – and “petty squabbles” could resurface.

Professor Begg added: “There is a clear sentiment in Europe that they need to pull together on this.

“On the other hand, the other problem is you will see a resurfacing of concerns by those who think European actions have gone too far.

“But it may also be the case that petty squabbles will be be put aside, leaders will say ‘why are we arguing about this, we are in a crisis.'”

Among these previous disagreements is the EU’s budget – which was being debated by Europe’s leaders before the continent was overcome by the coronavirus.

Similarly to the debate over the pandemic response, some nations were opposing additional spending.

Professor Begg said that this debate was “surreal” as the countries were “arguing over peanuts”.

He added: “The EU budget is around 1 percent of the bloc’s GDP – it is almost surreal because they are all arguing over a tenth of a percentage point.

“In policy terms it’s peanuts.”

After 28 hours of tense talks, the EU failed to come to a consensus in February on its economic plans for the 2021-2027 period as richer nations refused to up spending.

On one side of the debate were Austria, Denmark, Germany, the Netherlands and Sweden, dubbed by many as the ‘one percenters’.

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They are also commonly known as the ‘Frugals’ due to their staunch advocacy for a limited spending scheme: one percent of the bloc’s gross national income.

However, despite these nations being the biggest contributors and arguably the most influential in the bloc, the European Commission put forward plans for spending above the one percent mark – placed at 1.11 percent of EU GDP.

This will please some countries within the ‘Friends of Cohesion’, comprised mainly of southern and eastern European countries who argue for increased spending for less economically developed countries.

As the coronavirus poses news challenges, the EU’s existing cracks could widen.

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