Monday

18th Jun 2018

Hollande ready to compromise on EU budget

  • Hollande - EU budget cuts 'must not weaken economy' (Photo: Francois Hollande)

Francois Hollande is ready to accept a cut in the EU budget provided that it does not weaken the European economy and protects the poorest countries, the French President told MEPs.

Speaking in Strasbourg on Tuesday (5 February), Hollande said his "position is to make savings but not weaken our economy."

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He added that "the budget must continue the growth pact adopted in June and must support the most vulnerable Europeans", calling for Europe's poorest countries to have increased structural funds and financial support allocated to them.

Meanwhile, he called for better integration of national budget policies and common initiatives to support job creation and growth. "Otherwise we will be condemning Europe to endless austerity and I won't stand that," he said.

EU leaders will convene in Brussels on Thursday (7 February) for talks aimed at reaching a deal on the next seven year EU multi-annual financial framework (MFF) starting in 2014. Talks at a specially convened budget summit in November broke up without agreement following an offer of €973.5 billion in commitments from European Council President Herman van Rompuy.

In a bid to pacify rival groups among member states demanding cuts overall but seeking to maintain spending on agricultural subsidies and EU cohesion funds, President van Rompuy targeted the Commission's 'Connecting Europe" infrastructure projects as well as the EU's development aid budget for the deepest spending reductions.

The European Commission had initially proposed a package worth just over €1 trillion, but a number of countries want the EU to tighten its belt at a time when most European governments are pushing through national budget cuts.

Although Hollande did not spell out a precise figure, EU officials have suggested that the French President would accept a budget settlement worth around €960 billion. Van Rompuy has indicated that he will not circulate any new calculations before talks begin on Thursday.

Speaking in response to Hollande, Commission President Jose Barroso said that the budget would be a vital tool in reducing chronic levels of unemployment across the bloc and increasing the EU's competitiveness. "In order to guarantee a sustainable growth we need investment and the instrument for that is the EU's budget," he said.

However, Joseph Daul, the French leader of the centre-right EPP group, raised the prospect of MEPs vetoing a cuts package agreed by governments.

"These proposals are going in the wrong direction, attacking one of our best tools to generate growth - the European budget - of which 94% goes back to the member states. The proposal we have today is a political capitulation and we are going to reject it," he said.

For his part, Alain Lamassoure, the centre-right chairman of the Budgets committee who has led Parliament's negotiating team in talks on the annual budget and the MFF, sounded a note of frustration among deputies that "no one is speaking up for Europe at the Council table except President van Rompuy."

He added that the current method used to calculate the 27-country bloc's budget settlements was "the most unfair and unjust there is" - claiming that the poorest EU countries were subsidising rebates for some of the richest member states.

Last week, Parliament President Martin Schultz warned that the assembly would reject any deal that strayed too far from the commission's original proposal.

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EU leaders gather for budget horse-trading

EU leaders are gathering in Brussels for more horse-trading on the Union's budget, with any agreement having to satisfy penny-counting member states without alienating MEPs.

Opinion

Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

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Europe could lose out in North Korean bonanza

South Korean businesses including Hyundai and Samsung are already scoping investment opportunities. Will North Korea become a 'new Vietnam' opportunity - or more like Myanmar, where slow Brussels policy-making meant EU exporters lost out.

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