EU officials risk approval of recovery fund by Finland

by Pekka Vanttinen

EU Commissioners may have placed the bloc’s €750 billion recovery fund on shaky ground after telling MEPs the arrangement could become a regular and even permanent mechanism to boost growth. Fiscally conservative Finland has previously presented the fund, which requires unanimous approval from all 27 EU countries, as a temporary measure with no future joint borrowing.

For the Finnish government and supporters of the fund, the timing could not have been worse, coming days ahead of a vote by Finnish lawmakers on whether to approve the fund on Wednesday (12 May).

The fund was initially presented to parliament and to the Finnish public with assurances that there will be no joint borrowing in the future and the arrangement would be temporary.

But European Commission Vice President Valdis Dombrovskis and European Economic Commissioner Paolo Gentiloni told the European Parliament’s economic and monetary affairs committee on Monday that the recovery fund would not be a one-off measure, Reuters reported.

“The more successful we are in the implementation of this facility the more scope there will be for discussions on having a permanent instrument, probably of a similar nature,” Dombrovskis said.

Finland is the only EU country where a two-thirds majority is required to approve the fund. It now appears uncertain whether a majority will be reached.

Finnish Finance Minister Matti Vanhanen said it was not up to the EU Commissioners to decide on the future use of the arrangement in question. Dombrovskis then tweeted in Finnish that for the Commission it is absolutely clear that the fund is an extraordinary, one-off measure.

Finnish MEP Mauri Pekkarinen (Renew Europe group) replied to Dombrovskis: “A mistake has already occurred. Commissioners’ comments [are being] considered!”.

“True to form the Commission starts talk of permanency before it has proven it can actually deliver the promised next generation reform agenda. The omens aren’t good. No real reforms is no future for next generation and the Commission knows this,” an EU diplomat told EURACTIV.com.

*first published in: www.euractiv.com