After intense negotiations, long days and nights of clashes and a distinctly sour note underlying the entire summit, European Union leaders finally agreed on an unprecedented 1.82 trillion-euro ($2.1 trillion) budget and COVID recovery package. This agreement provided €750 billion in funding meant to counter the impact of the pandemic, while it also includes €390bn in non-repayable grants to the hardest-hit members, with Italy and Spain being the main recipients.
The harsh negotiations brought to the surface once again the deep economic, structural and cultural divide between North and South. This divide has been at the core of every serious political and economic crisis in the bloc so far and its reemergence served as yet another reminder of how unnatural, forced and unsustainable the integration vision of the Europhiles really is. Their wider strategic aims, much like this COVID relief package itself, are nothing more than a massive redistribution of wealth and a vain effort to impose uniformity on a radically diverse group of national identities, economic profiles and local political realities.
As we have seen so many times in past crises, the main sticking point in these most recent “rescue” talks were the legitimate grievances and concerns of the richer countries in the north, including the Netherlands and Austria, about having to foot the bill yet again and bail out their cash-strapped southern neighbors.
In this case, the disagreement centered on the question of loans vs grants, as the richer members initially insisted that the immense sums of money they were forced to give away should at least be repaid at some point in future. And so, in the name of “solidarity”, the nations that put up some opposition, the “frugal four”, i.e. Sweden, Denmark, Austria and the Netherlands, were named and shamed in the media, portrayed as heartless, Dickensian misers. Naturally, the fact that the chief beneficiaries of all that free money were in deep, chronic financial trouble long before the coronavirus even emerged was conveniently left out of the debate. Instead, the “frugal” were put under immense pressure to “do the right thing”, namely to agree that the majority of the support funding would be in the form of pure cash gifts. Apparently, these “persuasion” tactics also included histrionic outbursts: According to the BBC, “at one-point French President Emmanuel Macron reportedly banged his fists on the table, as he told the “frugal four” they were putting the European project in danger.”
The main problem with this record-breaking stimulus package is essentially the same with all its predecessors over the last decade. Not only does the EU like to redistribute wealth from the North to the South with clockwork regularity, but all these plans also fail to incorporate any kind of serious checks and balances about where and how the money is spent. As a result, we keep seeing massive waste and levels of corruption that are normally associated with developing economies. The mere scale of this most recent package only brings this issue into sharper focus, especially as it is underlaid by a joint borrowing scheme, which enables poorer EU countries to take out cheap loans using the creditworthiness of their richer neighbors that act as guarantors.
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