The first meeting between Finance Minister Sigrid Kaag (D66) and her German office colleague Christian Lindner (FDP) took place in Berlin this afternoon. The talks focused on additional sanctions against Russia because of the war in Ukraine, and the reform of European fiscal rules.
The ‘intention’ to continue the close cooperation with Germany is undiminished, Minister Sigrid Kaag emphasized in Berlin on Monday afternoon to three rotating cameras and a handful of newspaper journalists in a room of the German Ministry of Finance. “Especially in these difficult times that we are currently experiencing. We will eventually come out of this stronger.”
After Prime Minister Rutte and Minister Hoekstra (Foreign Affairs), Kaag is already the third minister from the Netherlands to pay a working visit to Berlin this year. But while the leaders of the VVD and CDA traveled to Germany with relatively little concern, the former diplomat has a lot to discuss on her first visit as finance minister.
We must use all measures to stand up for the people of Ukraine
Tactical
After the energy crisis and the screeching inflation, the war in Europe has been demanding all our attention for more than a week and a half. “We need to think carefully about the enormous changes in Europe, the impact of the war in Ukraine and the need for a firm political, military, but also financial and economic support from Europe. [op Rusland] to respond,” said Kaag. “We must use all measures to stand up for the people of Ukraine, the sovereignty of the country, as well as for the peace and security of the European Union.”
Neither Kaag nor Linder revealed anything about further targeted sanctions against Russian institutions, banks and individuals. The German: “We will only reveal names of authorities or persons once the punitive measures have been introduced, so that these parties cannot prepare tactically in advance.”
Negative consequences for our growth and inflation cannot be ruled out in this situation
Russia’s sanctions against EU companies will be fought together with the European Commission, as will the rising energy prices that are hindering companies, Lindner said. “We are doing everything we can to prevent economic damage and large losses” [voor het bedrijfsleven] preventable, but negative consequences for our growth and inflation cannot be ruled out in this situation.”
Cough up
The rising gas bill will largely have to be coughed up by German citizens themselves. “We need to show solidarity and increase the negative economic consequences,” Lindner said. Germany, which reportedly receives 55 percent gas from Russia, will not just end energy imports. ,,But this option is of course on the table. We must not give Putin long-term strategic advantages,” Lindner said, referring to the fossil fuel revenues that are filling Russia’s war coffers.
With the war in Ukraine, the discussion about the reform of the Stability and Growth Pact is also becoming increasingly loose. Where the Netherlands kept in the background in previous cabinets – because of, among other things, the fear that Southern European member states would win – there is now an initiative from the Dutch side, as was apparent from Kaag’s words. “We are looking at less income inequality between economies, debt reduction, but also investment.” Nevertheless, according to the D66 member, there must first be a ‘cautious and well-considered’ debate in Brussels. “It’s not wise to rush this decision in a crisis situation,” she said, as Lindner nodded in agreement at her side.
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