EU cracks exposed: Dutch blocked rescue package over fears it was ‘not too big to fail’

Alex Pigman, a Brussels-based journalist working for AFP, highlighted the deep divisions and bickering which has erupted between key players in the EU27 in recent days, in a series of tweets in which he dissected the strategies of several member states. The Netherlands, he suggested, were vehemently opposed to the concept of the eurozone, the monetary union of 19 EU countries which have adopted the euro as their currency, issuing eurobonds, a system whereby debt would be issued collectively, across the bloc, rather than to individual member states. Critics – most notably Dutch finance minister Wopke Hoekstra – believed the end result would be rampant, uncontrolled spending in southern European countries hardest hit by COVID-19, the cost of which northern countries would be required to share.

Mr Pigman posted: “Netherlands are assuming that ECB stimulus will provide enough cover to get eurozone to a recovery and out of this eurobonds debate.

“If not: bailout. (NL doesn’t think IT is too big to fail).”

By contrast, he added: “The eurobond camp has yet to reveal a political strategy on how to achieve them.”

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As for Germany, he said: “When Merkel opposes eurobonds, there’s usually a crack in the door, but no one follows it, because it means treaty change.

“The coronavirus crisis isn’t bringing treaty change (but early days maybe).”

Mr Hoekstra was today claiming victory, having dug his heels in on the issue.

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He described himself as “very satisfied” with the outcome on eurobonds, tweeting that “there won’t be any” and telling Dutch TV stations “sometimes you have to put your foot down.”

However, in a hint of deep divides further down the line, French counterpart Bruno Le Maire suggested the concept of “joint debt” was implicit in the arrangements unveiled yesterday.

He added: “Who’s going to raise the debt? There’s a lot of uncertainty that remains to be determined.

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“But I have a firm conviction that the fund will see the light of day and there will be debt raised jointly in a form that remains to be determined.”

Commenting on Mr Hoekstra’s stance, a Brussels-based policy analyst Pieter Cleppe told “If that is the position of the Dutch government, it may well be challenged domestically.

“I guess it will depend on the size of the bailout and of conditions, but at some point, transfers will no longer be acceptable.

“We can only guess when that point arrives.”

While the tough stance is backed by the Dutch Parliament, in Italy eurosceptic Matteo Salvini, leader of the right-wing Northern League, has denounced the bloc as failing to show enough solidarity.

Governor Luca Zaia, a member of Salvini’s Northern League in the Veneto region, one of the hardest hit in Italy, said: “The European debate is embarrassing not to say sickening”.

Joris Luyendijk, a Dutch author and political commentator, predicted Mr Hoekstra’s hard-line tactics damage the Netherlands’ diplomatic relationships within the union.

He added: “It’s horrible PR and horrible politics.

“At a time of unprecedented crisis Wopke offers southern Europeans an ideal hate figure. We will pay for this down the line, as a country.”

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