Saturday

27th Aug 2016

New EU budget proposal cuts across red lines

  • Summit room - EU budget hawks have threatened vetoes in November (Photo: Valentina Pop)

The Cypriot presidency has proposed cutting €50 billion off EU spending plans for 2014 to 2020 - a number that could trigger national vetoes and strikes by EU staff.

The Cypriot paper, circulated late on Monday (29 October), said spending should be "at least" €50 billion less than the European Commission's figure of €1,033 billion over the next seven years.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

It added: "According to the assessment of the presidency this is a starting point for delegations in order to reflect on the effects of reductions. More sizeable reductions are needed in order to reach a compromise."

Breaking down the cuts, Cyprus said cohesion funding - designed to help poor regions in the east and south of Europe to catch up - should go down from €495 billion to €472 billion.

Spending on farm aid and rural development should go from €386 billion to €379 billion. Funds for foreign policy are to remain more or less the same at €18 billion. Spending on pre-accession aid and global development should go from €70 billion to €65 billion.

It noted that money for EU institutions will also "have to be revised downwards" from the commission's €63 billion, but it did not give a new number.

With the biggest cuts to come on cohesion, the Cypriot idea will annoy the 13 eastern and southern EU countries in the so-called "Friends of Cohesion" group.

But the overall €50 billion reduction is set to face even bigger opposition from some of the 10 states in the so-called "Friends of Better Spending" club.

A "centrist" sub-group in the "better spending" alliance - containing EU paymaster Germany as well as Denmark, Finland and France - had earlier called for cuts of at least €100 billion.

A more hawkish element - containing the Netherlands, Sweden and the UK - wants to go further by cutting €115 billion to €130 billion off the commission's proposal.

The UK and the Netherlands have threatened to veto an EU budget deal at an upcoming summit in November if they do not get their way.

Swedish sources are also saying "the content of the deal is more important than the timing ... We also have a very strong position."

The Cypriot paper touches on the thorny question of national rebates.

It includes, in brackets, a commission idea to take away the UK's permanent rebate, in favour of "lump sum" rebate payments for the 2014 to 2020 period.

But, given the UK's rejection of the plan last week, it adds another option: "[The existing correction mechanisms in the current system of own resources of the European Union will continue to apply]."

It says nothing about a Danish plea for a €150 million-a-year rebate for Copenhagen - the subject of another veto threat.

Top EU officials have already warned the November summit could last as long as four days.

For its part, the EU commission on Tuesday morning said: "This [Cypriot] negotiating box is not supported."

"There are many in this city who believe there can be a deal, but just as many who think it will be difficult," an EU source said.

Meanwhile, amid the talk of further slashing pensions and perks for EU officials, things could get messy in the EU capital.

EU trade unions also on Monday announced a strike on 8 November, with an added warning of further strike action on 16 November if their position is not taken into account.

Correction: the original story said Finland wants cuts beyond €100 billion. In fact, it is in the "centrist" group with France and Germany

News in Brief

  1. Hungary plans to reinforce border fence against migrants
  2. France's highest court suspends burkini ban
  3. Greeks paid €1bn more in taxes in June
  4. Greek minister denounces EU letter on former statistics chief
  5. Turks seeking asylum in Greece may cause diplomatic row
  6. Merkel becomes digital resident of Estonia
  7. Report: VW will compensate US dealers with €1bln
  8. EU mulls making Google pay news media for content

Stakeholders' Highlights

  1. GoogleBrussels - home of beer, fries, chocolate and Google’s Public Policy Team - follow @GoogleBrussels
  2. HuaweiSeeds for the Future Programme to Bring Students from 50 countries to China for Much-Needed ICT Training
  3. EFASpain is not a democratic state. EFA expresses its solidarity to Arnaldo Otegi and EH Bildu
  4. UNICEFBoko Haram Violence in Lake Chad Region Leaves Children Displaced and Trapped
  5. HuaweiMaking Cities Smarter and Safer
  6. GoogleHow Google Makes Connections More Secure For Users
  7. EGBAThe EU Court of Justice Confirms the Application of Proportionality in Assessing Gambling Laws
  8. World VisionThe EU and Member States Must Not Use Overseas Aid for Promoting EU Interests
  9. Dialogue PlatformInterview: "There is a witch hunt against the Gulen Movement in Turkey"
  10. ACCAACCA Calls for ‘Future Looking’ Integrated Reporting Culture With IIRC and IAAER
  11. EURidNominate Your Favourite .eu or .ею Website for the .EU Web Awards 2016 Today!
  12. Dialogue PlatformAn Interview on Gulen Movement & Recent Coup Attempt in Turkey