The letter from the Dutch government to its Parliament
(… while we have to endure the arrogant tone of one of the most incompetent and uninformed ministers of homeland history, things go in a different way in civilized countries. Governments report promptly – that is, before – to their Parliaments. Here I report the translation – somewhat hasty – of the report made by the Dutch government to its Parliament, from which you will understand that the famous red lines of Minister Gualtieri – I called them so that he understood – have already been widely surpassed. But let's not say it: we remain in doubt that he doesn't know, because if he knew it, as his officials surely know, it would be very, very serious …)
During the previous Eurogroup of 7-9 April, ministers agreed to temporarily make the European Stability Mechanism (ESM) line of credit (ECCL) available to Member States wishing to use it for the COVID outbreak. 19. The next Eurogroup [of 8 May, NdCN] will discuss the further elaboration of this so-called credit line to support the pandemic crisis.
At the videoconference on 23 April, the members of the European Council welcomed the report which the Eurogroup approved on 9 April. In doing so, they invited the Eurogroup to make this package operational by 1 June.
The detailed characteristics of the MES credit line should be discussed in the next Eurogroup. These detailed features will then be recorded in standardized documents, which will allow all Member States to access this tool. Obviously, this elaboration must be in line with the agreements already agreed in the Eurogroup report of 9 April.
Some preconditions are important for the Netherlands.
First of all, as a condition of use of the credit line, it should be included in the memorandum of understanding that countries undertake to use the credit line to support internal financing of direct and indirect health care, healing and costs. related to prevention due to the COVID-19 crisis. Second, the credit line should only be available for the duration of the COVID-19 crisis. Third, the availability of credit per Member State should go up to 2% of the gross domestic product. Fourthly, it is important that the procedures for granting financial support by the ESM, contained in the ESM Treaty, are properly followed. This also implies that a decision in principle by the ESM board of directors to open the credit line to all Member States can only be based on the availability of the necessary reports: an analysis of the risks to financial stability, debt sustainability and financing needs. Fifth, the maturity of credit-based loans should be less than in the previous macroeconomic adjustment programs of the ESM.
After all, these are loans to countries that can still access the market at reasonable interest rates. On this basis, ESM loans can also be expected to be repaid relatively quickly.
Given the specific focus of the credit line on the COVID-19 epidemic, the director of the ESM suggested considering a lower price than that included in the pricing policy guideline. As regards the Netherlands, the costs for the credit line can be set at a lower level than prescribed in the current pricing policy orientation to take into account the exceptional situation of use of the ESM, in which the costs charged by the ESM to the Member State must always exceed the financing costs incurred by the ESM itself to mobilize the necessary resources.
If an agreement is reached on the characteristics of the credit line in the next Eurogroup, a meeting of the ESM Board of Governors is expected to be held on 14 May to make pandemic crisis support available in principle to all Member States. Relevant documents on the basis of which the board of governors can decide to do so will be sent to the Chamber as soon as they become available. The Council of Ministers will also notify the Assembly of its intention to approve or not approve the decision. After the decision, countries will have to submit a concrete application to use a credit line on an individual basis. Before the decision-making process relating to the granting of these individual lines of credit in support of the pandemic crisis, your Chamber will always be informed in accordance with the information protocol concerning parliamentary involvement in the use of funds and in the control of European emergency funds.
The other ESM instruments will remain available in the event that a country has financial and economic problems, subject to the conditions of economic and financial policy. The Netherlands has always stressed the importance of these political conditions, because it ensures that Member States emerge stronger from an economic and financial crisis.
( … I insist on one point: the Dutch are right, from their point of view …)
(… it is useless to underline the different level of democratic civilization of the other countries. But the relationship of the piddini with democracy is like what they have with culture: completely ornamental, and not experienced at all …)
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2020/05/la-lettera-del-governo-olandese-al-suo.html on Wed, 06 May 2020 14:51:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.