Netherlands willing to contribute €1 billion to EU coronavirus fund

The Dutch government is willing to contribute up to 1 billion euros to a yet-to-be-established European fund aimed at dealing with the coronavirus, Minister Wopke Hoekstra of Finance said. Countries hit hard by Covid-19 and that are not in good financial health can turn to the fund to finance medical aid. "I am thinking roughly of a few hundred million to 1 billion euros," Hoekstra said to NU.nl on Wednesday.

The Finance Minister stressed that this is not a loan, but a gift, and the Netherlands' "substantial contribution to public health in Europe". Countries who call on this fund must clearly need help, Hoekstra said. Figuring out exactly how the control and release of the funds will work, and the conditions attached, is the next step, he said.

Unlike the still contested European Stability Mechanism (ESM), contribution to this fund is not mandatory for EU Member States. The member states are free to decide if and how much they want to contribute. According to Hoekstra, there is "broad enthusiasm" among his European colleagues for this fund.

Hoekstra stressed that the Netherlands is and will remain vehemently against so-called coronabonds, where the funds raised from selling such bond instruments would be used to help all member states overcome economic hurdles during the ongoing health crisis. The money could then be invested in supporting any EU member state, while repayment obligations would be the responsibility of the entire EU. Italy and Spain, both very hard hit by the coronavirus, insist on such bonds, the Netherlands and other countries including Germany, France and Belgium are against it.

The Dutch resistance to coronabonds resulted in fierce criticism from Italy. Especially after Hoekstra said that countries should first pull out all the stops to recover from the economic downturn themselves. This statement prompted indignation, given that the Netherlands has far less public debt than Italy and therefore has much more financial room. 

Hoekstra understands the anger from Italy, he said to NU.nl. He previously acknowledged that his statements showed a lack of empathy. "It is now the task to proceed wisely with each other," he said to NU.nl.

Prime Minister Mark Rutte announced the plan for a coronavirus fund during a parliamentary debate on Wednesday. He said he will discuss this plan with European Council president Charles Michel, Italian Prime Minster Giuseppe Conte, and Spanish Prime Minister Pedro Sanchez in the near future.