EU recovery fund: Frugal Five not as frugal anymore

EU recovery fund: Frugal Five not as frugal anymore
The leaders of the Frugal 5 at the European Council: Mark Rutte (The Netherlands), Sebastian Kurz (Austria), Sanna Marin (Finland), Stefan Löfven (Sweden) and Mette Frederiksen (Denmark), credit: EU

The EU fund to tackle the COVID-19 crisis was approved by the European Council despite initial opposition by five member states that were perceived as lacking solidarity with other member states.

In July, a Special European Council adopted the EU budget for next period (2021 – 2027), including a €750 billion recovery and resilience facility in grants and loans. During the summit, Finland joined the group of the Frugal Four - Denmark, The Netherlands, Austria and Sweden - turning the group into the Frugal Five.

These countries were known as being hostile to increasing the size of the EU budget and delayed an agreement on the recovery fund because they opposed funding it by common debt. They also wanted to impose stricter conditions on the member states receiving the funding. The Dutch Prime Minister Mark Rutte even demanded the right of a single member state to veto the disbursement of the money.

A new report published yesterday (25 November) by the pan-European think tank European Council on Foreign Relations (ECFR) in cooperation with Danish Tænketanken EUROPA shows a more mixed picture among the Frugal Five. For comparison, France, Germany and Poland were also included in the on-line survey, which took place in late October and is considered as representative of the countries.

According to the findings in the survey, the reputation of the Frugal Five does not reflect public sentiment in these countries. Almost 80 % of their citizens do not believe that the EU is spending too much money on its COVID-19 recovery fund.

“This polling reveals that the public in so-called ‘frugal’ countries are most concerned about the misuse of funds by net beneficiaries of the EU budget, and that there’s a widespread belief that their leaders are not able to shape the future direction of the EU,“ commented Susi Dennison, co-author of the report and senior fellow at ECFR.

Among the “frugal” countries, concerns about the size of EU funding vary but the concerns were shared by only 20 – 24 % of the population. If this is the measure of “frugality”, then it is actually strongest in Germany, where it is shared by 26 %.  The primary concern of citizens in all countries polled is the risk of waste and corruption in recipient countries, with Austria as an outlier with 48 % agreeing on this.

That said, respondents in the Frugal Five expressed mixed feelings to the recovery package, with only 22% cited “optimism”. Negative emotions - worry, anger, and frustration – prevailed over positive ones, accounting overall for 40% of responses among the Frugal Five, significantly higher than in the other three countries.

The Frugal Five did after all accept the recovery package and compromised on their economic principles. Have they become less "frugal" and moved towards the other member states?

“This was precisely why we carried out our survey,” replied Susi Dennison. “We wanted to see whether this decision on the part of the frugal governments had ‘overstepped the mark’ in terms of voter support for financial solidarity with the rest of the EU to support the recovery and accepting the principle of borrowing.”

“In fact, it seems that the opposite is true: that voters in the so-called frugal states were not as frugal as their governments argued in their negotiations over the deal. It rather indicates that the governments’ push for frugality was more about tactics than about domestic political pressure.”

She thinks that “frugal” is the wrong label for all of the group and that “transformative” is a better word for describing their electorates. “They are in favour of an EU recovery in which member states support each other, spending on what is necessary, while respecting principles about the way money is managed.”

Among the states that come closest in the survey data to the ‘frugal label’, Finland is the only one of the five states in which as much as 50% of respondents expressed negative views about the recovery package, followed by Austria and the Netherlands going down to 42%.

Respondents in the Frugal Five expressed concerns about waste of money and corruption. Are they equally concerned about that this might also happen in their own countries?

“The responses on this issue are not country-specific but related to how the next EU budget will be used in general in the countries that receive support through the EU recovery package,” she explained. “Since the bulk of support from the recovery fund is not likely to go to the frugal states, one can infer from the response that the concern is mainly about other parts of the EU.”

ECFR’s director, Mark Leonard, added: “Instead of promoting a negative agenda of a minimum EU, focused on the market and not much else, the ‘Frugal Five’ should use the recovery package as a springboard to influence how the money is spent across the bloc, and as an opportunity to push the EU forward on issues such as rule of law, digital, green and security.”

On a positive note, across all countries in the survey, the value of EU membership - contrary to stereotypes - goes well beyond economics. Respondents appreciate for example the freedom to live and work in other countries (32%); the benefits of the single market (27%); co-operation on security, justice and terrorism (24%); protection from war and conflict (20%); and promotion of exports (20%).


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