Thursday

22nd Oct 2020

EU budget talks suspended in fight for new funds

  • MEP Johan Van Overtveldt, who leads the parliament's negotiating team, said the German EU presidency presented nothing new (Photo: European Parliament)

Talks between the German EU presidency and the European Parliament on the seven-year EU budget and coronavirus recovery fund broke down Thursday afternoon (8 October) shortly after they had started, in yet another sign of growing frustration on both sides with lack of progress.

MEPs suspended negotiations saying the German EU presidency - representing the council of member states - has not shown a "real will" to find an agreement.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The crux of the talks is additional funding, so-called top-ups, of €39bn MEPs are requesting for 15 EU programs, such as the Horizon research program and the Erasmus student exchange program.

The German presidency is arguing that budget ceilings, agreed by EU leaders at a marathon summit in July, will be impossible to change, pointing out that despite the UK leaving the bloc, the €1.8 trillion package is the largest in the EU's history.

"We had no other choice but to interrupt the meeting", the parliament's negotiating team said in a statement Thursday evening.

"We are waiting for the council to update its negotiating mandate and finally come back with a proposal that takes into account parliament's key demand to improve 15 flagship EU programs, with genuine reinforcements, for the benefit of the citizens", the lawmakers said.

MEPs added that progress has been made in talks so far "with concessions from both sides" on new own resources [new EU-wide levies], and parliament's oversight of the recovery fund.

"No compromise is possible on this point as long as the council rules out raising the MFF [multi-annual financial framework - budget] ceilings or excluding certain expenditure items like the interest for the recovery debt from their calculation," MEPs said.

The German presidency's spokesman Sebastian Fischer said it was "regrettable that the European Parliament missed the opportunity to take the MFF negotiations forward today."

He added in another tweet later: "It needs two to tango. A willingness to compromise is needed on all sides."

The mood has soured among negotiators while the German presidency hoped to wrap up talks by the end of September. The parliament gave itself until the end of October. The aim is to get the funds flowing from next January.

"It makes no sense to talk if there is no real movement. The council needs to decide, if they want a deal," German MEP Rasmus Andresen, who is part of the parliament's negotiating team, said in a tweet.

Toxic issues

The breakdown in talks has come after weeks of growing tensions and accusations of foot-dragging.

The 2021-27 budget needs to be approved by the parliament, but it is negotiated by member states' governments without parliament's direct involvement.

Earlier this week, German EU ambassador Michael Clauss in a letter told MEPs "member states are extremely hesitant to consider any further increases in volume coming on top of the historic deal in July".

He said that increasing the budget ceilings would require another meeting of EU leaders, which could put the whole package in danger.

Class added that an increase of "upper single digit" billion euros "might be possible".

The German ambassador also said that the rule-of-law conditionality linked to the EU budget cannot be tuned to the parliament's liking.

The issue has become politically toxic among member states themselves, and vis-a-vis the parliament. MEPs want the disbursement of EU funds to be suspended in case of broader rule-of-law issues, not only in case of fraud or corruption.

"It is clear that this will not be and cannot be a financial sanctions mechanism for member states which do not respect the rule of law," Clauss wrote, arguing that the Article 7 sanctions procedure is already in place to deal with those concerns.

In his response, MEP Johan Van Overtveldt, who is leading the parliament's negotiating team, said the council needed to compromise.

"I regret to see that, despite six trilateral dialogues, the council has not moved and there is nothing new in your proposal," he told Clauss.

After Thursday's talks MEP Margarida Marques called the German presidency's proposal "a provocation". "A single digit does not meet EU challenges and citizens' expectations," she added in a tweet.

Talks will resume next Wednesday, with the EU commission tasked with juggling numbers until then.

EU Parliament sticks to demands in budget tussle

The parliament wants €38.5bn extra for key programmes, which is less than their previous request of around €100bn. Negotiations continue on Thursday, but the budget and recovery could still get stuck on the rule-of-law issue.

EU parliament vows not to cave in to budget pressure

The parliament's majorty dismisses the German EU presidency's proposal on the rule of law conditionality, which has emerged as the main political obstacle to agree on the next long-term EU budget.

Agenda

EU summit focuses on Brexit and Covid-19 This WEEK

Talks between the UK and the EU have progressed painfully slowly, but a deal on future relations needs to be agreed by the end of October. MEPs and diplomats will have another go at settling the next EU budget.

Germany asks capitals to give a little in EU budget impasse

European Parliament negotiators are demanding €39bn in new funding for EU programmes such as Horizon research and Erasmus, in talks with the German EU presidency on the budget. Meanwhile, rule-of-law enforcement negotiations have only just begun.

News in Brief

  1. Commission to press Croatia on migrant 'abuse' at border
  2. Belarus opposition awarded 2020 Sakharov Prize
  3. Belgium's foreign minister in intensive care for Covid-19
  4. MEPs restrict CAP funding for bullfighting
  5. Coronavirus: Liège is 'the Lombardy of the second wave'
  6. UK to keep out EU nationals with criminal past
  7. Report: EU to restrict travel from Canada, Tunisia, Georgia
  8. Pope Francis supports same-sex civil unions

EU countries stuck on rule of law-budget link

Divisions among EU governments remain between those who want to suspend EU funds if rule of law is not respected, and those who want to narrow down conditionality.

Stakeholders' Highlights

  1. UNESDAMaking healthier diets the easy choice
  2. Nordic Council of MinistersUN Secretary General to meet with Nordic Council on COVID-19
  3. UNESDAWell-designed Deposit Return Schemes can help reach Single-Use Plastics Directive targets
  4. Nordic Council of MinistersNordic Council meets Belarusian opposition leader Svetlana Tichanovskaja
  5. Nordic Council of MinistersNordic Region to invest DKK 250 million in green digitalised business sector
  6. UNESDAReducing packaging waste – a huge opportunity for circularity

Latest News

  1. Nato and EU silent on Turkey, despite Armenia's appeal
  2. EU tells UK to decide on Brexit as deal 'within reach'
  3. EU farming deal attacked by Green groups
  4. France vows tough retaliation for teacher's murder
  5. All eyes on EU court for decision on religious slaughter
  6. 'Big majority' of citizens want EU funds linked to rule of law
  7. EU declares war on Malta and Cyprus passport sales
  8. EU Commission's Libya stance undercut by internal report

Join EUobserver

Support quality EU news

Join us