The Netherlands is involved in ‘intensive and constructive’ contact with other EU countries and members of the European Commission about plans to set up a multi billion euro coronavirus recovery fund, prime minister Mark Rutte told reporters on Wednesday evening.

But it is not a question of giving a yes or no to the Commission proposals, published earlier on Wednesday, Rutte said, adding that he expected the negotiations to take some time.

‘We have set out our position clearly,’ Rutte said. ‘Countries which are bailed out will have to say what they will do to make sure this situation does not arise again.’

The Netherlands, Sweden, Austria and Denmark have become known as the frugal four nations and published their own plans for the rescue package at the weekend.

The four countries support the establishment of a one-off emergency fund but do not back debt sharing or a ‘significant’ increase in the EU’s next seven-year budget, both of which are part of the Commission’s plans.

The European Commission outlined its proposals to set up a €750bn recovery programme known as Next Generation EU to the European parliament earlier in the day. The package is attached to a revised seven-year budget proposal which would total €1.1trillion for the years 2021 to 2027  – up from the €1.095 trillion package proposed earlier this year.

‘Today we face our very own defining moment, commission president Ursula von der Leyen said. ‘What started with a virus so small your eyes couldn’t see it, has become an economic crisis so big you simply couldn’t miss it.’

The Commission plan envisages a mix of €500bn in grants to countries hit hardest by the pandemic, and another €250bn available as loans. Italy and Spain will get much of the new money which, EU Observer reported, marks a turning point for the EU in moving towards joint debt.

Encouraged

Austria’s chancellor Sebastian Kurz told Politico.eu that he and the other leaders of the frugal four group have been encouraged by some aspects of the European Commission’s proposal for a coronavirus crisis recovery fund, but also cautioned it represents just a ‘starting point’ for negotiations.

‘What we find positive — not just myself, but the Netherlands, Sweden and Denmark — is that there is a time limit and that the fund will be a one-time emergency measure and not the first step toward a debt union,’ Kurz said.

Last Thursday, Dutch government policy advisory group SER said the Netherlands must show solidarity with the EU member countries which have been hardest hit by the coronavirus crisis, in its own interest.

Instead of a strict system of loans subject to conditions and reforms, the government should show more leniency and aim for ‘a responsible form of risk sharing’, SER’s coronavirus crisis think-tank said.