Thursday

29th Sep 2016

France and Germany cast doubt on EU budget deal

  • Merkel and Hollande want an EU budget deal, but say talks will be 'very difficult' (Photo: European Council)

The leaders of France and Germany have downplayed expectations that a deal will be reached this week on the EU budget for 2014-2020.

"We will do everything to find an agreement at the next summit, but conditions are not there yet," French President Francois Hollande told reporters on Sunday (3 February) alongside Italian Prime Minister Mario Monti.

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Monti, who visited Paris after a stop in Berlin earlier in the week, repeated his calls for a "fairer" deal, as his country is paying more into the common pot without having rebates like other big donors such as the UK or Germany.

Hollande's pessimism came just one day after German Chancellor Angela Merkel also cast doubt whether the bloc's 27 leaders will be able to agree on the €1 trillion budget on Thursday and Friday.

"We can not say yet if the talks will be successful, I only know they will be very difficult. But they are worth the effort," Merkel said in her weekly address.

She explained that the EU budget was important in order to make national budgets and recovery programmes more predictable.

A first attempt to reach a deal failed in November as the group of those advocating for cuts - including Germany - and the ones wanting more money were too far apart.

"We will do everything to reach a deal. Germany has of course its own interests, as the largest contributor, we want to see the funds used in a way that improves the competitiveness and performance of the EU. The measure for this competitiveness should be the best ones, because we need to keep up with others in the global world," Merkel said.

"Many think the EU is an expensive thing. But the funds we allocate to the EU are only one fifth of all national budgets taken together," she added.

Merkel on Monday is also due to receive the Prime Minister of Spain, Mariano Rajoy, for consultations ahead of the EU summit.

A joint Franco-German position ahead of the summit is unlikely, even though Merkel will be travelling to Paris on Wednesday for talks with the French President on this topic.

Their biggest area of contention is the reform of the farming policy, of which France benefits the most.

EU agriculture commissioner Dacian Ciolos told Der Spiegel he is "surprised" at the "almost ideological opposition" of the German government against plans to make subsidies more directly linked to environmental measures.

Ciolos also said that despite Berlin's calls for "smart spending", the German government is opposing a cap on how much large companies can receive from the EU farm aid pot.

New EU rules on financial products in limbo

A feud between MEPs and the EU commission is threatening to derail financial services regulation that would protect consumers from misleading investment products.

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