Finland rejects proposed EU recovery package in current form

Finland's government said on Thursday it would reject the European Commission's proposed package for recovery from the coronavirus pandemic in its current form.

The 27 European Union member states are due to discuss on June 19 the EU executive's proposal to raise an unprecedented 750 billion euros ($845 billion) of debt to top up joint spending to 1.1 trillion euros in 2021-27. The package will need the unanimous support of member countries. The Finnish government said it was still open to negotiating over the package, demanding that share of grants in the package be reduced and that of loans increased.

Finland's reservations add to resistance to the Commission's approach already raised by a group of from fiscally conservative northern EU nations dubbed "the frugal four": Austria, the Netherlands, Sweden and Denmark. The Commission has proposed borrowing from the market and then disbursing two-thirds of the funds in grants and the rest in loans to offset the unprecedented economic slump looming this year due to lockdowns to contain the spread of the virus.

Finland's government also called for the total size of the package to be reduced, its validity to be cut shorter than four years proposed by the Commission, and its maturity to be cut from a proposed 30 years. ($1 = 0.8878 euros)

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