Vienna - Austria and all other EU members stand to profit from a planned post-coronavirus reconstruction programme that is especially needed in the bloc's southern countries, the European Commission's envoy in Vienna has said.

Opposition

Austria, Sweden, Denmark and the Netherlands are opposed to the Franco-German initiative of EU grants to reboost the economy. They have proposed instead that hard-hit countries should take out repayable loans from the bloc.

"One thing is clear: Austerity will not get Europe out of this crisis. Europe has to grow out of the crisis," said European Commission envoy Martin Selmayr, the German who previously served as the top civil servant of the EU executive.

In a statement, Selmayr steered clear of the debate between Berlin and Paris on one side and the so-called Frugal Four on the other, but he reminded the Vienna government that nearly 10 per cent of its exports go to Italy, Spain, Croatia and Greece.

Italy was the third biggest market for Austrian goods last year, behind Germany and the United States, he added.

"The EU must take decisive action now. We need to make a splash, not just a few droplets," Selmayr said.

Recovery fund

German Chancellor Angela Merkel and French President Emmanuel Macron are calling for a 500-billion-euro (545-billion-dollar) recovery fund after the coronavirus pandemic.

The European Commission is due to make its own proposal on the new fund. Unanimous agreement from all EU 27 countries is required to make it operational.