Monday

27th Feb 2017

Germany: more cuts needed for EU budget deal

German Chancellor Angela Merkel likes football.

So much so, that a Paris stadium seemed like a good place to have a "brief, but intense" conversation with French President Francois Hollande on Wednesday (6 February) on the eve of an EU budget summit.

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.

No common proposal came out of the meeting. But a German official told journalists in Berlin on Wednesday that "the willingness to reach a deal on the EU budget is greater than the differences of opinion between France and Germany."

The two leaders then watched a friendly game between their national teams.

In what could be an omen of who gets their way on the budget, Germany won 2-1. Hollande on Tuesday signalled willingness to compromise on more budget cuts, but warned they should not endanger economic growth.

Germany, meanwhile, is going into the budget talks on Thursday with a demand for more cuts. Without naming a precise figure, the German official in Berlin noted that the previous seven-year budget was around €865 billion at constant prices, while the current proposal would go beyond €1 trillion, if you include a two percent yearly inflation top-up in the calculations.

"One percent of the gross national income [€1 trillion] is our maximum ceiling, given the budget consolidation efforts in member states. In Brussels it has also become clear now that more cuts are needed compared to the last proposal made in November," the official said.

One area with "significant room for cuts," in Germany's view, is the EU's own administrative expenses, which include the salaries of EU officials.

A general strike of EU staff took place in Brussels on Tuesday as a warning for EU leaders not to go down this path.

But the German official noted that EU institutions will have to stomach cuts just like everyone else.

"These will be difficult, but decisive negotiations. We want the talks to succeed, and Germany will contribute to a solution. But this will not be in the form of a German cheque, it will be in the willingness to compromise from all sides," the official said.

If the seven-year budget talks fail, the EU has to use yearly budgets based on 2013 figures.

Any changes or increases to 2013 figures would need to be decided in the EU Council by qualified majority and then get the consent of the European Parliament.

But yearly horse-trading and unclear majorities for one or another budgetary area would make the whole effort much more difficult to manage, the German official warned.

Meanwhile, the idea of excluding Great Britain - the country with the loudest calls for spending cuts - from a deal and seeking a budget agreement among 26 member states only is off the table.

"One of the results of November was that only a solution at 27 will give predictability for the EU budget," the German source said.

A first attempt to reach a deal on the 2014-2020 EU budget failed in November.

But Britain was not the only one to blame, as positions between a larger group of net budget payers advocating reductions and a club of net beneficiaries who want more EU "solidarity" were too far apart.

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.

Hollande ready to compromise on EU budget

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.

Stakeholders' Highlights

  1. International Partnership for Human RightsFreedom of Association and Expression Under Threat in Kazakhstan, Reports CIVICUS Monitor
  2. QS World MBA TourMeet with Leading International Business Schools in Brussels on March 6th
  3. EURORDISJoin Rare Disease Day and Help Advocate for More Research on Rare Diseases
  4. European Healthy Lifestyle AllianceStudents Who Are Considered Fit Get Better Grades in School
  5. QS World MBA TourMeet with Leading International Business Schools in Paris on March 4th
  6. Malta EU 2017Economic Governance: Agreement Reached on Structural Reform Support Programme for Member States
  7. Socialists & DemocratsWomen Have to Work Ten Years Longer to Match Lifetime Earnings of Men
  8. Counter BalanceTrans-Adriatic Pipeline Is a Major Risk for Banks, Warns New Analysis
  9. Martens CentreEU and US Migration Policies Compared: Join the Debate on February 28th
  10. Swedish EnterprisesTechnology and Data Flows - Shaping the Society of Tomorrow
  11. UNICEFNearly 1.4 Million Children at Risk of Death as Famine Looms Across Africa and Yemen
  12. Malta EU 2017End of Roaming Fees: Council Reaches Agreement on Wholesale Caps