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France and Germany have proposed to their EU partners the
creation of a 500-billion euro ($550-billion) recovery fund made
up of grants that would be paid to their hardest-hit regions.
It was opposed by four countries who call themselves the 'Frugals'
-- Austria, Sweden, Denmark and the Netherlands -- and want a
loans-based approach instead.
The debate about the recovery fund comes at a time EU countries
are also negotiating the bloc's long-term budget, its so-called
"multi-annual financial framework" (MFF), which the 'Frugals'
were also trying to reduce.
"My role is to avoid robbing Peter to pay Paul," Amelie de
Montchalin, France's European affairs minister, told reporters.
"You have a certain number of countries, the Frugals in
particular, who talk a lot today about a recovery fund, while
their real goal is not to have an MFF which is too big."
She said France would push to have both a recovery fund with
grants and a long-term budget with enough funding for programmes
such as defence, the transition to a green economy and
agricultural policy.
She said she did not want the MFF weakened as it was "a tool to
make this recovery permanent," de Montchalin said.
France, the top beneficiary of EU agricultural subsidies, has
resisted calls by northern countries to cut the bloc's farming
budget. It has also pushed for the creation of a defence fund to
help countries cut reliance on U.S. suppliers.
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