The self-proclaimed ‘frugal club’ -the EU countries that champion fiscal discipline and flatly reject any mutualization of debt- suffer their first defection. In response to an increasingly hostile geopolitical environment for Europe, the Danish Prime Minister, Mette Frederiksenannounces a radical change of position: it will support the issuance of Eurobonds and an open bar of public aid in order to increase investment in defense to stop Russia and also in productivity so that the European economy does not fall behind the United States and China.
“In the Danish Government we are taking a fresh look at state aid, the common debt and the EU budget. It’s a new time“, Frederiksen announced this Sunday in an interview with the Danish news agency. “All countries – and this also applies to Denmark, which is normally in the austerity camp – we must put aside automatic reactions and examine what Europe’s needs are and then adapt economic policy to them, rather than the other way around,” explains the prime minister, who has also become one of Ukraine’s strongest defenders in the EU.
The ‘frugal club’ was officially formed in 2020 with the aim of boycotting the issuance of common debt for the €800 billion Next Generation recovery fund. Their starting lineup was made up of the Netherlands, Austria, Sweden and Denmark.with Finland as the main supporter. Germany then supported Eurobonds. Finally, the ‘frugals’ gave in with the demand that the experiment should not be repeated, but rather that it was a specific and extraordinary initiative to respond to the pandemic.
However, the debate has now been reopened following the report prepared by the former president of the European Central Bank (ECB), Mario Draghiwhich figure in 800,000 million extra euros per year the investment necessary to improve the competitiveness of the European economy and strengthen the European defense industry. Draghi proposes a new issue of Eurobonds, following the Next Generation model. A plan that has attracted the support of France, Italy and Spain, but which the ‘frugal’ rejected, this time with the support of Germany. “We must talk about projects, not new debts“said Austrian Chancellor Karl Nehammer at the recent Budapest summit.
Frederiksen’s swerve now opens a big fissure in the ‘frugal club’. What do the Danes gain from having to take responsibility for the debt of the southern countries? asks the agency’s journalist. “I don’t think we can think like that in the coming years. I think we have to look at it a bit the other way around. If Europe continues to lag behind in practically all parameters, then it will lose its position. Europe will fall apart and this will have fatal consequences for everyoneincluding all Danish families,” responds the Danish Prime Minister.
“What Frederiksen is saying is that everything has changed, that nothing will ever be the same, that we must leave behind our usual positions because the world has transformed in an incredibly dramatic way. In Europe we are fighting for our survivalwith Russia on one side and Trump on the other,” explains Marlene Wind, professor of Political Science specialized in the EU at the University of Copenhagen, to EL ESPAÑOL.
Mette Frederiksen, two weeks ago, with an injured girl in a children’s hospital in kyiv.
Reuters
“She admits very frankly and openly that her position on the common debt is totally new, that she has changed her mind: the world has changed and there is no longer time to be reticent, to be frugal or to be skeptical of the European project. I think this may have an influence on both Germany and Finland. Maybe not on the Dutch, but it seems to me that it does. The ‘frugal club’ is on its way to the grave“says Professor Wind. For now, the rest of the frugal ones are not taking any notice and are simply taking note of Denmark’s change, diplomatic sources tell this newspaper.
In contrast, Frederiksen’s turnaround has been greeted with enthusiasm by the first Defense Commissioner in the history of the EU, the Lithuanian Andrius Kubiliuswho just this Monday officially began his mandate. “Very important announcement from the Danish Prime Minister. We need a big Bang in the European defense review!“Kubilius wrote on his social network account X. The president of the Commission, Ursula von der Leyenhas tasked him with presenting a White Paper during the first 100 days of his tenure.
“Russia spends up to 9% of its GDP on defense, while Europe spends an average of 1.9%. There is something wrong with this equation. Our defense spending must increase. We need a single market for defense. We need to strengthen the defense industrial base,” Von der Leyen said during the investiture speech of her new college last week in Strasbourg. Denmark takes over the rotating presidency of the EU for the second half of 2025, just as debates on the The next community budget and the possible issuance of common debt will reach their maximum intensity.
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