Netherlands presses counter-proposal to 'generous' EU spending

The Netherlands is spearheading a counterplan to the 500 billion euro recovery proposal laid out by German Chancellor Angela Merkel and French President Emmanuel Macron on Monday. In a newly-drawn proposal on Saturday, the Dutch have asserted that loans, rather than grants and subsidies, should be available to the eurozone economies bearing the brunt of the unfolding economic crisis.

The new proposal was suggested by the Netherlands along with Denmark, Sweden and Austria; a group of countries collectively dubbed the 'Frugal Four'. It insists on a temporary European emergency fund scheme be formed, as well as a modernization of the European budget be adopted, according to public broadcaster NOS.

The counterplan contends that the joint Franco-German proposal, which had proposed a response "united and in solidarity" with other EU nations, is too generous.

The development follows two months of protracted debate around how the EU should crank up its spending in light of the economic calamity brought about by Covid-19. Fiscally conservative nations, such as the Netherlands, are insisting on loans, while a large bloc of European countries stand in favor of grants, subsidies and mutualized debt in the eurozone.