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4th Dec 2022

Unhappy EU leaders begin budget haggle

EU leaders on Thursday evening (20 February) attempted to overcome major differences in the way they see the bloc's next seven-year budget, at their summit in Brussels.

The departure of the UK leaves a €60-75bn gap in the over one trillion euro spending plan over 2021-2027, and wealthier countries that pay more into the EU budget are being asked to pay the bulk of it.

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  • The 2021-2027 budget numbers in detail

While all member states will have to pay more, a group of rich countries, the Netherlands, Sweden, Austrian and Denmark and also Germany are arguing to limit spending at 1.0 percent of EU gross national income (GNI) and want to retain the rebate, a form of backdated compensation.

Poorer member states want to reverse cuts to EU subsidies. Meanwhile all member states are also feeling the pressure to do more on climate, migration, digitalisation and foreign affairs.

National leaders have all criticised the EU Council president Charles Michel's attempt at a compromise, of 1.074 percent of GNI plus deep cuts in traditional policies.

"The proposal on the table is that we are going to do more with less: less persons, less money. And I don' know if Michel is now the twin brother of David Copperfield, but I don't know how this should work," Luxembourgish prime minister Xavier Bettel quipped on arrival at the summit, referring to the magician.

"This MFF negotiation will be very hard and difficult," Estonia's prime minister Juri Ratas warned as he made his arrival.

Poland's premier Mateusz Morawiecki went furthery, saying the discussions will be the "hardest-ever negotiations in history" for the EU.

"We cannot accept a dramatic increase of our piece [contribution]," Swedish PM Stefan Lofven said as he entered talks, adding: "Countries with stronger economies need to pay more, but we cannot accept such a dramatic increase."

"[After Brexit] it is a clear signal for our citizens to say Europe is alive and we can still function really well." Latvian prime minister Arturs Karins argued before the meeting, urging an agreement.

"It's a complicated task and we will have to overcome big differences," Germany's chancellor Angela Merkel conceded.

"Germany is not satisfied with the current status of negotiations," she added.

EU leaders will first discuss among themselves, then will break into smaller groups, or hold bilateral meetings. Talks could go into Friday, or even perhaps Saturday morning.

One of the key issues is whether member states can agree to retain the rebate to Germany, Denmark, Sweden, Austria and the Netherlands, while other countries argue the concept should disappear because the original UK rebate is gone.

"I have infinite patience," Portugal's Antonio Costa said on arriving.

EU leaders face major clash on rule of law budget link

One major issue dividing member states in the ongoing budget negotiations is inserting a direct link between EU subsidies and the rule of law. While the biggest battle will be over figures, the rule of law conditionality also creates tension.

EU countries enter final phase of budget talks

Nobody liked the compromise proposal, which means it might work, budget commissioner Johannes Hahn said on Monday, as leaders prepare for long talks later this week.

Net payer countries push back on EU budget plans

As EU budget negotiations enter a nasty phase, EU council chief Charles Michel tries to please two divided groups of member states, but Austria's Sebastian Kurz has warned net payers cannot be pushed for more.

No breakthrough at EU budget summit

EU leaders failed to reach agreement on the EU's long-term budget, as richer states and poorer 'cohesion countries' locked horns. The impasse continues over how to fund the Brexit gap.

EU leaders struggling to break budget deadlock

Cuts to innovation, space, neighbourhood and other programme-spending push down the latest budget proposal on the table of EU leaders. Rebates could stay on, to win the support of the net-payers for a deal.

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