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Tuesday, October 3, 2023


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EconomyEurope Budget: The EU-27 separate without Comprommise

Europe Budget: The EU-27 separate without Comprommise

EU member states split after two days of negotiations, without reaching agreement on the EU budget.

We will have to meet again: the 27 separated on Friday evening after two days of negotiations in Brussels, without agreement on the next multi-annual budget of the European Union.

Despite the multiplication of meetings – bilateral, four, five – to try to reconcile the points of view, the president of the European Council Charles Michel missed his bet.

He was unable to reach a compromise immediately with the EU leaders, whose views both on the overall level of the budget for the period 2021-2027 and on the distribution of expenditure (from the digital agriculture, from defense to migration) were distant.

“We came to a block against block situation. This is why it failed, “said a European negotiator to AFP.

No “miracle”

Hungarian Prime Minister Viktor Orban predicted that it would take a “miracle” to conclude the discussion in one summit. It did not happen.

“We need more time,” could only see Charles Michel at a press conference. It has yet to decide how to proceed with further negotiations.

They were very difficult, he conceded, without however regretting to have organized this summit which allowed to have a clear idea of ​​the positions of each. “As my grandmother said, to succeed you have to try,” he said.

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The costed proposal he had put forward had been “adapted” on Friday afternoon by the services of the European Commission to take account of everyone’s requests and red lines.

But these new figures were welcomed: it took less than half an hour for the 27 incomes all around the negotiating table to unanimously note the need for more time in order to find a compromise.

“This negotiation was dominated by a group called the frugals, which took on too much importance, and what happened was a reaction from a group of 16 countries which represent a much larger population than the others and which has decided that his voice will be heard with the same firmness, ”commented a Spanish government source.

“Friends of cohesion”

Madrid is one of the leaders of the group of Member States who have called themselves “friends of cohesion” or “friends of an ambitious Europe” and who oppose the vision of the four “frugals” – Netherlands, Austria, Denmark, Sweden.

The latter plead to limit the budget to 1% of gross national income for the period 2021-2027 in order to limit their national contributions.

The 27 member states must find a compromise on the overall level of the budget for seven years as well as on its distribution between the different policies of the EU while taking into account the “hole” left by the departure of the British, an amount estimated at between 60 and 75 billion euros.

Charles Michel’s quantified proposal proposed a budget at 1.074% or 1.094.8 billion euros. Commission technicians lowered it to 1.07%, with certainly an increase in funds allocated to the common agricultural policy (CAP), but a lot of expenditure cut from other headings, such as the military sector and space.

The negotiations took place largely through meetings with two or more member states. Among the many configurations of his meetings, Charles Michel brought together the four “frugals” with Emmanuel Macron  and Angela Merkel , whose countries are the two main contributors to the budget after the departure of the British.

CAP and Brexit

Two days before the Paris Agricultural Show, the French president had reached the summit by saying that he was ready to “fight” for the CAP, in which Charles Michel’s proposal envisaged cuts of around 14%.

“It is not the CAP that can pay for Brexit,” he said after the summit. For their part, the “frugal” wish, with Germany, distribution of resources more favorable to the new priorities (research, defense, protection of the external borders, etc.).

Another area of ​​contention has been the discounts, which now benefit five countries – Germany, Denmark, the Netherlands, Austria, and Sweden. Their amount is five billion euros per year. The other states, France in mind, would like to put an end to it thanks to the departure of the United Kingdom, the country which imposed this practice.

The dissensions also related to the European Union’s own resources, a category in which Charles Michel wants to innovate in order to help supplement national contributions.

There is a “big deal” around a tax on non-recycled plastics, according to European Commission President Ursula von der Leyen. But the idea of ​​transferring part of the profits recorded by the European carbon markets (sale of pollution permits) from the member states to the EU coffers met with more opposition. 

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