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PM Marin: "No deal" a possibility in EU's €750b package talks

Finland wants a smaller recovery package with a greater emphasis on loan rather than grant funding.

Pääministeri Sanna Marin saapumassa suuren valiokunnan kuultavaksi Pikkuparlamenttiin Helsingissä 16. heinäkuuta.
Prime Minister Sanna Marin arriving to brief Parliament's Grand Committee on Thursday morning. Image: Emmi Korhonen / Lehtikuva

Finland is still not fully on board with the European Council’s proposal for a 750-billion-euro recovery plan to be distributed to member states by way of grants and loans.

Chair of Parliament’s Grand Committee Satu Hassi said that while the committee sees the recovery package as essential, it is still not satisfied with the way it is structured.

Hassi told reporters at a news conference on Thursday that a compromise proposal by European Council President Charles Michel is not quite enough.

"In the Committee’s view the compromise proposal has moved in the right direction, but the overall [mechanism] is still not acceptable to Finland," Hassi noted.

PM Marin to join EU leaders

Meanwhile Prime Minister Sanna Marin, who briefed the Committee on Thursday morning along with European and constitutional law experts, said that it is possible that EU leaders meeting to discuss the package this weekend will not find consensus. Marin will represent Finland at the talks due to begin on Friday.

"The countries are far apart," she declared, adding that Finland will be aligning itself closely with the so-called "Frugal Four" — Austria, Denmark, Sweden and the Netherlands, who are advocating a more modest package.

Both Marin and Hassi told reporters that Finland’s goal is a smaller package that would place greater emphasis on loan funding rather than direct grants.

"We also want the distribution of funding to be more clearly based on the original proposal that considers the impact of the coronavirus crisis on each country’s economy," Hassi said.

EU member states are under pressure to find common ground on the recovery plan. Once they do so, draft legislation will be handed over to national Parliaments — including Finland’s. Parliament is not due to vote on the measure until late autumn when it considers framework funding.

The recovery fund would increase the flow of funds from the EU to Finland, but would also hike Finland’s loan commitments.

Committees at odds over proposal

The Grand Committee previously considered that the recovery fund would be good for Finland as long as Finland got the sums it hoped for.

It also pointed out that reviving European economies would be good for its small, export-oriented economy.

However the Constitutional Law Committee has expressed concerns that the recovery package is unconstitutional and that it violates the EU’s founding treaty.

Some of those concerns eased somewhat when EU legislators agreed at Finland’s request to determine how to write national laws dealing with the package.

On Tuesday the Constitutional Law Committee said that the government’s position on the recovery mechanism was headed in the right direction from a constitutional perspective.

However it deemed that Finland should attempt to limit any new debt and get an understanding of its liabilities under the plan.

Government and opposition part ways

The EU’s recovery fund aims to dig the bloc out of an economic crater caused by the pandemic. However Finland expressed its discomfort with the fact that the majority of the 750-billion-euro package would be handed out as grants, while a smaller portion would be distributed as loans.

However opposition parties in Finland say they want Finland to adopt an even stricter position on the issue. MPs from the National Coalition Party, the Finns Party and the Christian Democrats each filed dissenting views on the matter with the Grand Committee.

In a statement, NCP committee members described the proposed time schedule for the recovery measure and loan repayment timetable as too long. They also proposed adding measures to improve member states’ debt sustainability.

The Finns Party and Christian Democrats called for an even more stringent approach.

"We propose rejecting the entire package and negotiating the multiannual financial framework at a level that would meet [the needs of] the current period. We think that this package is not a winner but a loser. The government’s argument that this would revive Finland’s export sector is not credible," Finns Party MP Jani Mäkelä said.

Both the government and a majority of the Grand Committee have defended the package by saying that Finland’s export-driven economy would benefit from the recovery of its EU counterparts.

Edit: Headline updated for greater clarity at 11:05am on 17 July.

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