As European Union states wrangle over a massive stimulus package to deal with the coronavirus crisis, the Finnish government has argued that the emphasis should be more on loans to the worst-hit countries, and less on outright grants. Finland's opposition parties are demanding that payments be contingent on structural reforms in recipient countries.
On Friday the Finnish Parliament's Constitutional Law Committee rejected taking on debt to pay for the EU stimulus fund, arguing that it would violate the EU's own laws.
The Grand Committee, which is responsible for EU affairs, meanwhile backed the government stance.
Finland wants smaller package
Its chair, Satu Hassi of the Greens, said the committee backs the cabinet on the issue but stressed that there is a long process of negotiations ahead, and that the committee will revisit the question later.
The European Commission is calling for a 750-billion-euro treasure chest to deal with the economic fallout of the pandemic. It says that 500 billion should be handed out to member states as outright grants while 250 billion would be in the form of loans. The fund would be underwritten by a joint loan, taken out by the Commission.
Under the Commission's plan, the biggest recipients would be Italy and Spain, with smaller amounts for France, Germany, Greece, Poland and others.
The Finnish government has proposed a number of changes, such as that the assistance should be primarily in the form of loans with a shorter repayment time than the suggested 30 years, and that the overall fund should be smaller.
Opposition demands tougher conditions
Hassi said that Finland must protect its exports, and predicted that the stimulus package would have a positive impact on them.
EU leaders will negotiate on the package by videoconference next Friday, as Finns celebrate Midsummer's Eve.
MPs from two opposition parties, the conservative National Coalition (NCP) and the Christian Democrats (CD), issued dissenting statements, calling for stricter conditions for stimulus fund payouts. The NCP argued that recipient countries should be forced to commit to structural and competitiveness reforms, the rule of law and sustainable investments. The CD said that the proposal violates the EU constitution, a view also raised by the Constitutional Law Committee in a statement earlier on Friday.
Constitutional Law Committee seeks amendments
The Constitutional Law Committee that changes must be made to the proposal, and that Finland must protect its power over its own budget.
According to Constitutional Law Committee chair Johanna Ojala-Niemelä of the prime minister's Social Democratic Party, the Commission's plan may violate the EU constitution. She cites it article on balanced budgets, which may be interpreted as forbidding the Union from borrowing money to hand out as grants.
The Constitutional Law Committee also said the government must provide an overall evaluation of Finland's responsibilities and risks in relation to all EU stimulus efforts, and their possible impact on the country's budget sovereignty.
The final deal negotiated by national leaders must be approved by the European Parliament and then all 27 national parliaments.