MNI BRIEF: Germany Tries To Calm Storm Over EUR200Bln Aid Plan

German Chancellor Olaf Scholz will use this week’s meeting of European leaders to try to defuse tensions over his EUR200 billion fiscal programme to protect consumers and businesses, which has prompted calls from other countries for EU-level funding to help states with less fiscal capacity, European officials told MNI.

German officials are already pointing out that the two-year plan will draw on Germany’s allocation of funds under the NextGenerationEU programme and that the EUR200 billion headline number represents only its maximum ceiling.

In a newspaper op-ed earlier this week, European Economy and Internal Market Commissioners Paolo Gentiloni and Thierry Breton proposed an extension of the EUR100 billion SURE loan-based programme used during Covid to help economies with the impact of high energy prices

While German, Dutch and other Commission officials have pushed back against the idea, officials expect so me discussion as to what help can be provided at an EU level, maybe using remaining NextGenEU funds. (See MNI: Inflation Strengthens Hawks' Resolve In EU Debt Talks)

“There is no formal proposal, but there are plenty of ideas floating around,” an official said.

EU leaders will hold an informal summit on Friday following the first meeting of the European Political Community on Thursday, which also includes non-member states the UK, Norway and Turkey, in talks on topics like defence and security, energy and migration.