The EU’s freshly-revealed recovery fund for coronavirus-ravaged states "was foreseeable" but placed too much emphasis on grant rather than loan funding, Finnish European Affairs Minister Tytti Tuppurainen said on Wednesday.
Tuppurainen was responding to the European Commission’s proposal for a 750-billion-euro stimulus fund, 500 million of which would be distributed in the form of grants, while 250 million would be offered as loans.
"The proposal published by the Commission today was foreseeable, including the size of the Recovery Fund, though the share of grants exceeded our expectations," Tuppurainen said on Twitter on Wednesday evening.
Finland had hoped that the recovery funds would be distributed primarily in the form of loans, rather than direct financial support.
"However it is good that support will be channeled [to member states] via the EU’s multi-year framework. It would therefore not be [free] grant money but would be shared based on certain priorities," she added.
Finland's position to crystallise next week
Tuppurainen did not say what Finland’s final position on the Commission’s proposal would be or how much Finland would benefit from it.
She said that Finland’s position is that it is important that funding distributed through the EU budget is open to all member states.
"Funding for agricultural development will increase and for example, the Just Transition Fund and research will get additional resources. We will benefit from all this," she added.
The minister said that Finland will begin to form a position on the proposal next week. The Commission is expected to hand over the legislative proposals to member states on Thursday.
"Negotiations will then begin at the level of heads of state and a decision will require unanimity by the European Council [heads of government]."
Tuppurainen speculated that a decision could be reached even before the European Council physically meets. A live meeting would take some time due to restrictions imposed because of the coronavirus pandemic.
Orpo: Finland must press for emphasis on loans
Chair of the opposition National Coalition Party Petteri Orpo expressed views that largely tracked with those of the minister.
"The Finnish government must now push for recovery funding to primarily be given as loans. And for those loans to have conditions," he said.
Orpo commended the Commission’s proposal for having "the right goals" in terms of how the money should be used.
"Structural reforms, sustainable green growth, energy efficiency and decarbonisation, they are all the right goals. They should also be required," he noted.
He said that it is good that the fund would also partially be subject to parliamentary decision making and the multi-year funding framework.
"It is open, transparent and democratic. One problem [has been] that for every crisis, a new crisis mechanism has been created that cannot be considered transparent," he added.
The NCP chair said that Finland must ensure that new instruments conform to the EU treaty and the Finnish constitution.
"This is an important time everywhere in Europe. For example, the EU treaty cannot be stretched too far. At some point there will come a time where the treaty will have to be significantly amended."
Finns Party chair: Proposal breaks rules
Jussi Halla-aho, chair of the largest opposition party, the nationalist Finns Party, said that the EU bailout proposal violates the EU’s founding treaty.
"The EU treaty forbids the union or its member states from taking responsibility for each other's debts and the recovery fund clearly breaks this fundamental rule," he declared.
"My concern is that this is becoming an EU habit. For legislation to always be broken when needed, so that it loses its meaning," he added.
Halla-aho said that with the support of France and Germany, the European Commission is driving the EU toward a deeper federal union and a ‘debt union’, with the coronavirus crisis as an excuse.
"This grant money component is probably a bit much and there is room for negotiation there because it’s known that net payers have a very negative view of this idea," Halla-aho said.