EU Joint Borrowing Conundrum: Northern Nations Push Back

Germany, the Netherlands, and Sweden oppose EU joint borrowing amid new financial proposals, viewing it as unnecessary in non-crisis situations. Dutch Finance Minister criticizes the proposed 2 trillion euro budget as excessive. The debate highlights differing fiscal philosophies within the EU, with joint borrowing seen as a one-off pandemic measure by some.

At a G20 meeting in Durban, South Africa, finance ministers from Germany, the Netherlands, and Sweden reaffirmed their opposition to European Union joint borrowing, despite increasing global challenges. Denmark also expressed skepticism, signaling a broader resistance among northern EU members.

Specifically, Dutch Finance Minister Eelco Heinen dismissed the European Commission's newly proposed 2 trillion euro budget for 2028 to 2034 as overly ambitious and "dead on arrival." Heinen reiterated the Netherlands' long-standing opposition to joint borrowing, a tool designed to fund EU-wide spending while enabling cheaper borrowing.

The EU previously adopted common borrowing to tackle the economic recovery from the coronavirus pandemic. However, nations like the Netherlands and Sweden view this as a unique response to an extraordinary crisis, not a precedent for future financial strategies. German Finance Minister Lars Klingbeil echoed this sentiment, highlighting that joint debt is unsuitable without a current crisis warranting such measures.

(With inputs from agencies.)