By Agencies
Germany, the Netherlands, and Sweden have voiced strong opposition to joint borrowing within the European Union, even as global challenges mount. This stance was emphasized by finance ministers from these nations during discussions at the G20 meeting in Durban, South Africa. Denmark also expressed skepticism regarding the proposal.
Dutch Finance Minister Eelco Heinen criticized the European Commission’s proposed 2 trillion euro ($2.31 trillion) budget for 2028 to 2034, labeling it excessively large and “dead on arrival.” He stated, “I’m not in favor of joint borrowing. The Netherlands has never been and will continue on that path.”
Some EU members contend that shared debt could facilitate funding for extensive spending plans, enabling cheaper borrowing options. The concept of common borrowing was initially implemented to assist countries in recovering from the COVID-19 pandemic. However, nations like the Netherlands, Germany, and Nordic countries have been reluctant to subsidize less fiscally disciplined southern states.
Swedish Finance Minister Elisabeth Svantesson remarked that the pandemic-related joint debt was an extraordinary measure. “For us and for the whole parliament, from left to right, it was that we did that once. And that was not to be repeated,” she noted.
Danish Minister of Economic Affairs Stephanie Lose cautioned against viewing joint borrowing as a panacea, stressing the importance of remembering that borrowed funds must eventually be repaid.
German Finance Minister Lars Klingbeil emphasized that while the EU had engaged in joint debt during a crisis, such measures are not suitable for addressing the current financial landscape. “Fortunately, we are not in such a crisis right now,” he said.
In 2020, the 27 EU nations agreed to collectively borrow 800 billion euros for the Next Generation EU program, aimed at pandemic recovery. Heinen reiterated that this fund was a one-time initiative, asserting, “never again.” He added, “When that fund was being set up, the Netherlands already said, be careful, because one day that bill will be presented, and that’s the moment we’re in right now.”
