28th Sep 2023

EU Commission asks for €65.8bn to top up strained budget

  • “We have to consolidate our budget as member states do,” EU budget commissioner Johannes Hahn told reporters on Tuesday (Photo: European Commission)
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The EU Commission has asked for an increase of €65.8bn in a review of the EU's long-term budget, after several crises and increasing inflation drained existing funds.

"We have been using the budget more than ever," EU Commission president Ursula von der Leyen said on Tuesday (20 June), adding that the commission's proposals were an "absolute must."

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"We have to consolidate our budget as member states do," EU budget commissioner Johannes Hahn also told reporters.

Some of the new funds would go to support Ukraine with grants of €17bn and €15bn for migration and neighborhood policy.

Another part would pay for a rise in interest payments on EU debt with up to €19bn.

The EU executive also proposed €10bn additional money for defence research and innovation, with the hope of boosting Europe's industry. It also proposed €1.9bn for higher administration costs and €3bn for unforeseen expenditures until 2027.

"What we are proposing is what member states want us to do, and what member states called on us to do so. Do member states want us to respond to catastrophes inside and outside the EU? Do they want us to help African states, the answer is always yes, but then there is a cost attached to that," Hahn said, referring to EU countries' reluctance to chip in with more money.

The sum of €65.8bn "is not the result of some sort of artificial calculation, it has been a very careful identification of real needs that member states are constantly calling on us to do," the Austrian commissioner said, adding: "It is not just about paying lip service, we have to take action".

Member states need to agree on the proposed numbers among themselves and with the European Parliament by 4 December at the latest, so that next year's budget can be adopted accordingly.

Hahn said EU leaders will have a first discussion on the topic at their summit next week. "If we want to be a serious political and economic player we need more rescues," he added.

Germany and the Netherlands have already said that while they are supportive of extra funding for Kyiv, they expect the Commission to take into account that national budgets are also under pressure.

Germany's finance minister Christian Lindner warned last Friday that EU countries were facing "very difficult budget negotiations" at home, and "this is not the time to ask member states for more funding".

Key MEPs tasked with negotiating the EU's budget welcomed the call for additional funds, but criticised the commission for not adding more money to back green technologies.

"The European Parliament across political groups has already called for fresh money for fresh initiatives to promote the semiconductor industry in the negotiations on the EU Chips Act," Green MEP Henrike Hahn also said in a statement.

The MEP pointed out that the commission did not deliver on a promised sovereignty fund, which was supposed to finance joint EU projects to keep the bloc ahead of global competition in clean technologies.

Instead of the sovereign fund, the commission proposed a so-called Strategic Technologies for Europe Platform, which would be funded by reshuffling existing cohesion funds and €10bn in additional resources.

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