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The economical four

There has been a long fight in Brussels, as long as never before at an EU summit. Under the German presidency of the council, this time it was mainly a group of countries with the strange name of “the frugal four” that set the planned aid package for the “reconstruction” of the European economies badly battered by the Corona measures on a neoliberal course with a tough negotiating line. In the end, they won almost all along the line and, true to the old Thatcher Motto “I want my money back”, were even able to negotiate generous contribution discounts. In the German media, these “thrifty four” were usually portrayed as opponents of Angela Merkel. This is thought a little too short, as this group also and above all presented Merkel’s actual positions, which she was not able to present due to the presidency of the council as a broker. As in the old days, Germany once again hid behind hardliners who, with their positions, attracted the resentment of the rest of the EU – formerly it was the British, now it is the “frugal four” who should actually be called the “neoliberal five”. The biggest winner is once again Germany, the big loser is once again the solidarity.

The term “frugal four” alone is already a clever PR campaign. Unlike, for example, the term “stingy”, the term “frugal” actually has a positive connotation. It is therefore not surprising that the term” thrifty four " comes from an essay that Austrian Chancellor Sebastian Kurz published as a guest article in the Financial Times to convey the common line of his country and the states of the Netherlands, Denmark and Sweden during the EU budget dispute in February this year. The term therefore goes back to one of the key actors of the “frugal four” and is thus actually quite easily recognizable as such PR action. It is all the more incomprehensible that almost all German media today adopt this PR Term 1:1 uncritically.

The budget dispute in February already showed that these four countries are by no means alone. At that time Finland shared the positions of this four-party alliance and also and above all the large and powerful Germany at the EU level stood behind Kurz in terms of content, Rutte and co.above all the Dutch Prime Minister Mark Rutte was Germany’s closest Partner in February.

This “hiding” behind a Hardliner has a tradition in Germany. Over the decades, starting with Margaret Thatcher, it was mostly the British behind whom Germany liked to hide when it came to keeping the EU as small as possible, shaping it according to neoliberal ideas and enforcing a conservative and dirigiste fiscal policy at the EU level. Now the British have left and with the self-proclaimed “thrifty four” and the Hardliner Mark Rutte Germany has apparently found a worthy successor.

The controversial points of the current EU summit, which mainly dealt with the 750 billion euro “reconstruction Plan” and the more than one trillion euro EU Budget for the next budget period from 2021 to 2027, were in essence known for a long time. States such as Spain and Italy wanted the highest possible subsidies from the EU, which should ideally be paid out without preconditions. The group around the Netherlands wanted as little subsidies as possible, but instead loans that are linked to conditions, especially in the form of neoliberal reforms; so exactly the form of” aid " that Germany has favoured since the financial crisis (keyword: Troika, EFSF, ESM).

This neoliberal line has always been represented more or less offensively by Germany in the past in close partnership with Austria, Finland, Sweden and the Netherlands, the countries that today call themselves the “frugal four”. Over time, however, the resistance grew and France in particular became more and more sympathetic to the idea of the “Eurobonds” or “Coronabonds”, which not only Kurz and Rutte, but also Merkel categorically reject. What could be better than to embrace the French president so tightly that he has no room for his own ideas? This is exactly what Angela Merkel did and together with Macron presented an ambitious-sounding “reconstruction Plan” in the run-up to the EU summit … a Plan that she certainly knew was going to be plucked to pieces at the Rutte, Kurz and their “frugal four” summit to the point that it ultimately corresponds exactly to the German, but not the French, ideas.

That’s exactly how it happened. Stingy instead of solidarity and Mark Rutte and Sebastian Kurz gave in the play with preference the “stingy scoundrel”, knowing that this role in their own country brings them applause from the voters and keeps the competition from the right, here Geert Wilders, there the FPÖ, from the body. Out of the 750 billion euros of “reconstruction grants” proposed by the EU Commission, 390 billion euros were cut at the end-incidentally, at the last Minute, of all things, in the EU – initiated investment programme for the health sector. So much for Corona.

These 390 billion euros will now be granted as a grant, but only if the recipient presents a “reform programme” – that is, Troika 2.0, first neoliberal reforms, then money. It is also interesting that it is always communicated that these grants do not have to be repaid. Of course, they have to, except that they are indirectly financed by EU debt, which in large part is later repaid by the regular contributions of the member states; thus also by the states that make use of the grants.

These regular contributions were, in the end, exactly the currency with which the “frugal four” had their small “concessions” repaid. Now one has to ask: what concessions? After all, only parts of a maximum demand, which included the right of veto of each individual state in the allocation of grants and loans, deviated, which in any case never had a realistic Chance of acceptance outside this group of states. On the other hand, however, the EU has made concessions and these concessions are huge.

At present, it is precisely those “thrifty four” and Germany that benefit from a rebate scheme for EU contributions, which was enforced by the British at the time. These discounts were to be abolished - as foreseen by the budget plan adopted in February. After the longest weekend of negotiations in the history of the EU summits, there is now a result that would have impressed even the Iron Lady, Margaret Thatcher – the discounts will not be abolished, but doubled! The results now include Denmark (322 million euros), Austria (565 million euros), Sweden (1,069 million euros) and the United States. The Netherlands (EUR 1,921 million) and Germany (EUR 3,671 million – each per year) made significantly fewer contributions to the EU than had actually been planned. For Germany alone, the rebate for the adopted six-year budget framework amounts to a staggering 22 billion euros. In the wake of the “frugal four”, Germany has successfully fought through its own interests.

The Budget is fixed and if five states have to pay significantly less, the Rest of course has to compensate for this financial gap. So it is now up to countries such as Spain, Italy and France, i.e. the states whose economies have been hardest hit by the Corona measures, to pay more in the future, while precisely the states whose economies have been least affected by the measures will receive a fat discount. Stinginess is cool? At least it pays off and remains the top guideline at EU level.

This result will be appreciated in Berlin. Now the Dutchman Mark Rutte has taken on the character of the “villain”; the role in which Margaret Thatcher excelled for years. Only a week ago, Angela Merkel met Mark Rutte for a special meeting and also strengthened him in his line, which was to be understood as a frontal attack on the Plan she “jointly” presented with Macron. Merkel has played two-pronged and won. European solidarity has lost. Let’s forget about solidarity. Apparently, they only exist in Sunday speeches.