Saturday

25th Nov 2017

Analysis

EU budget summit exposes weak Franco-German relations

It was funny old summit last week. It broke off without agreement on the EU's 2014-2020 budget. But the failure was neither a big surprise nor particularly acrimonious.

Already before the meeting, German Chancellor Angela Merkel, something of a weathervane for EU decisions, said it would be no big drama if agreement only came in spring.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

After negotiations, several EU leaders remarked that the mood had been comparatively positive. Indeed, on Friday (24 November) afternoon the biggest point of dispute appeared to be whether to continue to try to reach a deal.

Eventually they broke off. The mooted four-shirt meeting was a mere two-shirter, no longer than a traditional summit. The statement afterwards was unusually to the point.

There "was a sufficient degree of potential convergence to make an agreement possible in the beginning of next year," it said.

The EU's €1 trillion 7-year budget has never been solved in one summit. Former British leader Tony Blair, in charge of the discussions in 2005, famously concluded that negotiating the Northern Ireland peace process was easier. For budget historians 1999 was a notoriously toxic affair.

The surprise was the changing alliances ahead of and during the summit. And the fact that Britain was not isolated - even though the ingredients were all there for it to be so.

Ahead of the summit, British leader David Cameron lost few opportunities to speak of the "wasteful" EU budget. Faced with a restive domestic parliament, he was also the first to threaten to use the veto - although that particular club became steadily less exclusive as the summit approached.

The budget antics came on top of a profound evolution in the UK's relations to the EU, to the extent that there has been much talk of whether London, with every disparaging comment, is simply talking itself out of the European Union.

But before the meeting, care was being taken both in Berlin and Brussels to meet Britain's concerns. UK officials, for their part, let it be known that the initial pre-summit proposal went in the right direction, even if it did not go not far enough.

During the summit, Germany made sure Britain was not isolated. Along with the Netherlands and Sweden, the four said the proposed €973 billion budget was still too large.

The other major dynamic of the meeting was the lack of a Franco-German bulwark. In 2002, for example, President Chirac and Chancellor Schroeder - much to the chagrin of Blair at the time - cut a long term deal on farm spending. The deal, extremely beneficial to France, tied the hands of budget negotiators in 2005.

But relations and priorities are different now.

Paris is still keen on farm and regional spending, but Germany attaches more worth to cutting the overall bill.

Relations between Chancellor Merkel, a conservative, and France's President Francois Hollande, a socialist, are not particularly warm. Their views how to get out of the economic crisis are very different.

Meanwhile, France has still to undertake serious structural reforms - reforms its large neighbour already undertook by 2005. Consequently, Germany views France as one of the sick men of Europe. Earlier this month, given an opportunity to do so, its finance minister Wolfgang Schaeuble could not bring himself to praise France's economy and reform efforts.

The discrepancies have put the relations out of kilter. And this has had a knock-on effect. EU Council chief Herman Van Rompuy's initial budget proposal was an anathema to France. It cut both farm and regional subsidies and kept the British rebate.

Paris was said to be alarmed at the way the pre-summit negotiations were conducted and particularly the fact that Berlin worked closely with London.

"I think psychologically the French are in an unusual place," said one diplomat. "Because of their standing in the system and that they are masters of (budgetary) detail, they are used to getting their own way pretty easily."

"The Germans have been saying [to France]: 'Well if you want to be the hyphen between the North and South, then you have to accept the consequences. We are no longer necessarily going to be looking after your interests in quite the same way'," the diplomatic source added.

Leaders break off EU budget talks

EU leaders on Friday decided to break off 2014-2020 budget negotiations after a second compromise attempt failed to reconcile those wanting cuts and those asking for more money.

MEPs told to prepare for budget cuts

MEPs should brace themselves for an overall cut in the next EU budget framework, commission President Barroso has warned.

Opinion

Divided Europe, divided Eurozone

In the past few days, Brussels has been swept by a EU budget debate for the years 2014 to 2020, and the continuing saga of the Greek debt. Current solutions reflect old challenges and new divisions, writes Dan Steinbock.

Commission warns Italy over high debt level

The Italian government must demonstrate it is making an effort, or the EU will consider launching a procedure. France and Romania are also under scrutiny.

News in Brief

  1. Merkel: Germany remains 'active' in EU
  2. Work with Israel, Egypt on gas exploration, says Commission
  3. Only seven EU states have 'advanced' stage climate plans
  4. EU dashes integration hopes of eastern countries
  5. EU approves joint Irish electricity scheme
  6. German president to launch 'Grand Coalition' talks
  7. Irish opposition 'threatens national interest', says minister
  8. SPD drops opposition to grand coalition in Germany

Stakeholders' Highlights

  1. EPSU-Eurelectric-IndustriAllElectricity European Social Partners Stand up for Just Energy Transition
  2. European Friends of ArmeniaSignature of CEPA Marks a Fresh Start for EU-Armenia Relations
  3. Nordic Council of MinistersNordic Energy Ministers Pledge to Work More Closely at Nordic and EU Level
  4. European Friends of ArmeniaPresident Sargsyan Joined EuFoA Honorary Council Inaugural Meeting
  5. International Partnership for Human RightsEU Leaders Should Press Azerbaijan President to End the Detention of Critics
  6. CECEKey Stakeholders to Jointly Tackle the Skills Issue in the Construction Sector
  7. European Friends of ArmeniaLaunch of Honorary Council on the Occasion of the Eastern Partnership Summit and CEPA
  8. Idealist Quarterly"Dear Politics, Time to Meet Creativity!" Afterwork Discussion & Networking
  9. EPSUStudy Finds TUNED and Employers in Central Governments Most Representative
  10. Mission of China to the EUAmbassador Zhang Ming Received by Tusk; Bright Future for EU-China Relations
  11. EU2017EEEstonia, With the ECHAlliance, Introduces the Digital Health Society Declaration
  12. ILGA EuropeFreedom of Movement For All Families? Same Sex Couple Ask EU Court for Recognition