Divisive EU budget battle begins

 

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Image source, European Council

The member states of the European Union put forward their respective budgetary positions yesterday at an informal meeting of the European Council. With Brexit blowing around a €10 billion per year gap in the EU budget, some member states fought hard against paying anything more into the budget, with others trying to fend off cuts to programmes they benefit from.

New funding priorities agreed

The Multiannual Financial Framework (MFF) is the long-term EU budget, normally set for a period of 7 years. It sends spending limits on certain programmes, and has to be agreed unanimously by member states with the consent of the European Parliament.

President of the European Council Donald Tusk said that all EU leaders approached the budget debate with “open minds, rather than red lines.” The leaders agreed to spend more on stemming illegal migration, defence, as well as on Erasmus+.

The European Council also agreed to speed up its work on the next MFF, but Tusk warned that agreement by the end of 2018 seems unlikely. The conclusions of the MFF negotiations may happen after the European Parliament elections of May 2019.

The European Commission proposal on the next MFF is scheduled to be presented by the latest in early May.

Divisions over the size of the budget

Ahead of the meeting, Dutch Prime Minister Mark Rutte said he would fight his hardest to ensure that the Netherlands wouldn’t have to pay more into the budget, but conceded that his position was a minority one among the member states, with only Austria and Denmark being on the same page.

Many member states also backed potentially paying more into the budget, such as France, Germany, and Ireland. President of the European Commission Jean-Claude Juncker estimated that there was a fairly large number of countries willing to pay more, around 14 or 15.

All leaders agreed to work on the “modernisation” of the EU budget, implying spending cuts to some programmes. The European Commission has been warning that it will likely have to cut agricultural and structural funds to make up some of the post-Brexit gap.

The European Parliament has called for the next budget to be 1.3% of the EU’s GNI, and for “own resources” for the EU to be explored, such as a financial transaction tax and a share of tax of companies in the digital sector. They also proposed for all rebates to be scrapped.

Budget conditionality less divisive than expected

After the meeting, President Tusk that the idea of putting conditions on EU funds, such as the reception of refugees, was “less controversial than expected. He said that he had heard only positive reactions to these proposals.

Tusk mentioned even the Polish Prime Minister was ready to support conditionality, if it was built on “very objective criteria.”

Some have also put the idea of linking national economic reforms with the disbursement of EU funds, such as Prime Minister Rutte. A more controversial proposal is to link respect for EU values such as the rule of law to EU investment funding, which the European Parliament has called for.

 

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