It is unclear whether the “emergency brake” from the European Recovery Fund, which allows Member States to withhold payments if countries do not comply with the conditions, actually has the stopping effect that Prime Minister Mark Rutte has so far outlined.
This is a pause and not an emergency brake, the European Commission said de Volkskrant know.
The CDA also has questions about this part of the agreement. Member of Parliament Pieter Omtzigt wants to know whether the mandate for payment is with the European Commission, which deals with the day-to-day management of the EU, or with the 27 EU government leaders united in the European Council.
150 local VVD members had previously expressed critical comments about this. “The emergency brake that Rutte wanted turns out to be buttery soft,” said Lars Ruiter, councilor in a North Holland municipality, on behalf of the group. The Telegraph.
A Brussels diplomat says he is satisfied with the effect of the emergency brake. “Every emergency brake is a pause. Ultimately, that train will start running again.”
NU.nl asked the European Commission several times on Thursday for further explanation, but received no answer.
Rutte: ‘My goal is not to pull the emergency brake ‘
The recovery fund, which consists of € 390 billion in grants and € 360 billion in cheap loans, should absorb the financial blows of the EU’s corona crisis.
In exchange for support from that fund, countries must implement reforms so that the economy can better absorb the next blow. These reforms will often concern the labor market, the pension system or tax collection.
According to Rutte, an emergency brake has been installed at his request if a Member State is not making sufficient progress. Just after the agreement was reached on Tuesday morning, the prime minister emphasized that he would rather not use it. According to him, it should primarily have a warning effect.
“My goal is not to pull the emergency brake. My goal is to make sure those reforms happen,” Rutte said at the news conference.
Member State can withhold payment for three months
The agreement stipulates that Member States must submit recovery and reform plans to the European Commission for assessment if they wish to claim corona aid.
The heads of government then have to approve the plans by a simple majority. In other words, 55 percent of the member states that represent at least 65 percent of the European population must agree.
When all signals are green, the payout starts. That happens in parts. A subsequent installment will only be paid if the country adheres to interim targets.
That is when countries can intervene and what Rutte calls the emergency brake. If one or more Member States find in the “exceptional” case that there is a “serious deviation” in the reform plans, then that country may put the matter on the agenda for the next EU summit.
No money will be paid in the meantime. In principle, this entire process should take no longer than three months.
EC believes that payment can be resumed after three months
The European Commission stated earlier this week that if the countries fail to agree after three months, it is also the same Commission that can resume payments with the support of a simple majority of the Member States.
CDA Member of Parliament Omtzigt wonders what will happen after three months if the Netherlands thinks that a country does not comply with the agreements, but a majority of the EU member states disagree. “Is the European Commission allowed to pay the money or not?” Said the Christian Democrat in written parliamentary questions to Rutte.
The House of Representatives has yet to consider the agreement. At least that will happen after the summer holidays.
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