- The coronavirus has hit Europe hard, bringing its major economies to a complete standstill.
- The pandemic is also shaking the foundations of the European Union.
- Italy is still the worst-hit EU nation by the virus.
- Data out Thursday morning showed that 898,822 workers have lost their jobs in Spain since the lockdown began on March 12.
After much criticism, the Dutch government now wants to give a "gift" to other European countries that are grappling with the coronavirus outbreak, including Italy and Spain.
The coronavirus has hit Europe hard, bringing its major economies to a complete standstill. France, Germany, Italy and Spain — the four biggest EU economies — are all in lockdown, meaning that citizens are only allowed to leave their houses to buy food or medicine. The situation has been particularly dire in Italy and Spain where the number of infections and deaths are higher than those in China, where the outbreak began in late 2019.
The pandemic is also shaking the foundations of the European Union — the political and economic group of 27 countries — by resurfacing an old divides between northern and southern nations.
The Netherlands unveiled Wednesday a plan for a "coronafund," a common basket of cash filled with contributions from member states. "These are not loans or guarantees, but gifts to help people in need," Dutch Prime Minister Mark Rutte told lawmakers on Wednesday.
The Dutch proposal comes after the country refused the idea of issuing joint European debt to mitigate the costs of the virus. The Dutch government wants to show solidarity with other EU nations, but it believes issuing joint debt is a step too far, which will take years to negotiate. Lawmakers in Germany and Austria have a similar opinion.
The Dutch position sparked anger across southern European nations, which are in favor of bolder moves to support all EU economies during the pandemic.
Portuguese Prime Minister Antonio Costa lambasted the Dutch finance minister for "repulsive" and "senseless" comments, after the latter said Italy and Spain should be investigated for not having enough fiscal space to deal with the crisis.
The Netherlands, with a current account surplus and a debt-to-GDP ratio below 60%, is one of the few EU countries that has respected the bloc's fiscal rules in recent times. With its fiscally-conservative approach, the country took the leadership of the "Hanseatic League" a few years ago. The informal group of northern EU nations has pushed back against significant steps for euro zone integration.
The Dutch plan for a "coronafund" comes as the entire region is racing to come up with new ideas on how to reduce the economic impact of the pandemic.
France, for example, also wants a common EU fund to help with costs. Bruno Le Maire, the French finance minister, told the Financial Times Wednesday that this fund should have a five to 10-year limit.
"Having a fund for, let's say, five or 10 years — with a limited timeframe — and with the possibility of having common debt but only within that fund, which might be more acceptable for other countries, might be a solution," Le Maire told the newspaper.
Speaking at a press conference Thursday, Le Maire said the Dutch proposal was a "first step in the right direction."
"Everybody is aware that there is a lack of solidarity among European countries and it is time now to show our solidarity to face the crisis," the French finance chief said.
Euro zone finance ministers are due to have a video call Tuesday next week to discuss these proposals.
In the meantime, Italy is still the worst-hit EU nation by the virus. There were 4,782 new cases and 727 deaths in the 24 hours up to Wednesday, according to data from the Italian authorities. This has brought the total number of infections to 110,574 and the death toll to 13,155.
Italian Prime Minister Giuseppe Conte said Thursday that the government is preparing new additional measures to mitigate the impact of the crisis. He told Il Fatto Quotidiano that he aims to take these to Parliament before the Easter holiday.
Italy has been in national lockdown since early March and this is expected to last at least until April 13.
Data out Thursday morning showed that 898,822 workers have lost their jobs in Spain since the lockdown began on March 12.
The Spanish labor ministry said the sectors with the greatest decreases in workforce were construction and hospitality.
Spain's death toll has reached 10,003 and there have been 110,238 confirmed cases so far, according to the latest figures unveiled Thursday morning by the Spanish health ministry.