Tuesday

5th Mar 2024

EU leaders struggling to break budget deadlock

  • EU Council president Charles Michel (m) sitting down with leaders of the so-called 'Frugal Four', including Danish PM Mette Frederiksen, Dutch premier Mark Rutte, and Austrian prime minister Sebastian Kurz (Photo: Council of the European Union)

EU leaders were trying to break the stalemate in divisive talks over the bloc's next seven-year budget as their summit continued to its second evening on Friday (21 February).

On Friday evening the EU Commission put forward a proposal on adjustments - endorsed by EU Council president Charles Michel - that would mean an overall spending of 1.069 percent of the bloc's gross national income (GNI).

Read and decide

Join EUobserver today

Get the EU news that really matters

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

... or subscribe as a group

In actual payments from member states over the seven-year 2021-2027 period it would mean 1.049 percent of the EU's GNI.

Michel's original proposal was at 1.074 percent of the GNI, which proved too high for the net payers.

Talks have been stuck between a richer group of member states, the 'Frugal Four' - the Netherlands , Austria, Denmark and Sweden - that want to see EU spending capped at 1.0 percent and a larger group of member states that wanted to see more investment.

The new proposed cuts come mostly from the research and innovation Horizon, space, defence and neighbourhood programmes, a convergence program for countries not yet in the eurozone, military mobility, and some safety margins planned within the budget.

The numbers prepared by the EU Commission would also mean that the rebates to the net payers would remain at a nominal value.

Austria would receive an additional €100m and the Netherland could keep a higher mount of tax levies collected on behalf of the EU at its ports, while Denmark and Sweden would get corrections for supporting the eurozone budget.

There would be some money reshuffled to the cohesion and agriculture policies, but the balance of the budget between policies would remain.

One of the so-called 'own resources' of the EU budget, the contributions of member states from the EU Emission Trading System (ETS) is likely to be scrapped.

The 27 EU leaders sat down together on Friday night to discuss these new numbers.

Second try

After an inconclusive Thursday session between EU leaders with EU council president Charles Michel, bilateral talks continued on Friday morning.

The 'Frugal Four' were pointing at an around €20-26bn in spending that could be saved in the safety margin of the budget plans, and on cutting back on less essential programs.

However, Hungary's prime minister Viktor Orban told journalists on Friday afternoon that he and the loose group of countries that benefits from EU subsidies, the so-called 'Friends of Cohesion' were aiming for 1.3 percent of GNI - which closer to the European Parliament's proposal.

Orban said he doubted there could be a deal on Friday as positions were too far away.

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.

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 supply chain law fails, with 14 states failing to back it

Member states failed on Wednesday to agree to the EU's long-awaited Corporate Sustainable Due Diligence Directive, after 13 EU ambassadors declared abstention and one, Sweden, expressed opposition (there was no formal vote), EUobserver has learned.

Opinion

The six-hour U-turn that saw the EU vote for austerity

The EU's own analysis has made it clear this is economic self-sabotage, and it's politically foolish three months from European elections where the far-right are predicted to increase support, writes the general secretary of the European Trade Union Confederation.

Opinion

Why are the banking lobby afraid of a digital euro?

Europeans deserve a digital euro that transcends the narrow interests of the banking lobby and embodies the promise of a fairer and more competitive monetary and financial landscape.

Latest News

  1. EU agrees rules to ban products made with forced labour
  2. I'll be honest — Moldova's judicial system isn't fit for EU
  3. Rafah invasion — a red line for EU on Israel?
  4. EU must overhaul Africa trade offer to parry China, warns MEP
  5. EU watchdog faults European Commission over Libya
  6. Hungary's Ukrainian refugees in two minds as relations sour
  7. The six-hour U-turn that saw the EU vote for austerity
  8. Defence, von der Leyen, women's rights, in focus This WEEK

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us