Tuesday

18th May 2021

EU countries enter final phase of budget talks

  • Budget commissioner Johannes Hahn and Croatia's state secretary for EU affairs, Andreja Metelko-Zgombic after the meeting

EU affairs ministers entered the final phase of negotiations on the bloc's seven-year budget on Monday (17 February), ahead of a special summit on the issue on Thursday.

But opposing positions among member states that want to cap EU spending at one percent of Europe's gross national income and those arguing for a higher overall budget have remained unchanged.

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"The new negotiating box presented by [EU council president] Charles Michel can serve as a basis for further discussions," budget commissioner Johannes Hahn said after the meeting.

"It is clear that the negotiating box is a compromise trying to converge member states' divergent positions, so it is a step into the right direction," he said of Michel's proposal.

He added that the proposal will make it difficult to fulfil the EU's ambitions due to deep cuts in the digital policy and external affairs areas, however.

He also said cuts in administration make it "close to impossible for all European public services to deliver".

He warned against a delay in agreement among member states, saying EU projects will be at risk if no deal is done.

"All member states have to move a bit, so that everyone can win a lot," he said.

Michel's proposal put the overall spending at 1.074 percent of GNI over seven years.

However, that is still too high for some of the net contributors to the budget, especially the so-called frugal four - the Netherlands, Austria, Denmark, and Sweden.

"The overall level is still too high," Finland's EU affairs minister Tytti Tuppurainen also said upon arriving at the meeting.

Rebate debate

France's EU affairs minister, Amélie de Montchalin, whose country wants to see more money dedicated to new EU priorities and to maintain agricultural funding levels, said member states had to act responsibly.

She also said rebates, a refund system initially set up for the UK, but also benefitting the Netherlands, Sweden, Austria, Germany, and Denmark, would have to go.

"France is a net contributor, we bring to the budget more than we receive, but we want to pay for Europeans, for concrete projects, for tangible benefits," she said, adding that France did not want an agreement at any cost.

The frugal states have said they want to hold onto the rebates permanently.

Meanwhile, Germany's finance minister Olaf Scholz, who was present at another meeting in Brussels, said Michel's proposal was a "step backwards", adding there were "far too few modern policies".

EU officials are now preparing for a long summit on Thursday that could drag on into Friday.

"If nobody is satisfied, it is probably a good compromise ... if everybody was critical this indicates he [Michel] found a good middle ground for the beginning of the negotiations," Hahn said after the EU affairs ministers' discussion.

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As EU leaders gather on Friday to start discussing the future of the EU's spending after the UK leaves, major battle lines are already emerging among member states. Here is a look at the key issues.

Unhappy EU leaders begin budget haggle

EU leaders arriving at the Brussels summit criticised the budget proposal of EU Council president Charles Michel, as richer member states insisted holding onto their rebates, while poorer countries wanted to avoid deep cuts to their subsidies.

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