21 February 2020

EurActiv: EU leaders fail to agree on first post-Brexit budget as divisions grow

EU countries failed to narrow deep differences over the bloc’s next seven-year budget as a group of net contributors refused to approve bigger spending and instead pushed for big cuts for farmers and poorer regions, in a bid to fill a €75 billion hole left by Brexit.

European Council President, Charles Michel shared with the EU leaders a last-minute document drafted by the European Commission with small concessions to each side.

But 25 minutes of discussion in the plenary was enough to see that the EU executive’s attempt to narrow the differences on the multiannual financial framework for 2021-2027 was insufficient.

The differences were too big between the net contributors, named the “Frugal Four” (the Netherlands, Austria, Denmark and Sweden), and a group of 17 countries opposing the cuts to the Common Agricultural Policy and Cohesion.

Michel summarised the efforts of the last two days by saying that “as my grandmother used to say, if you want to succeed, you have to try at least.”

He said EU leaders had been “very committed, very determined”. “But it needs not only efforts, but tenacity, constancy, and determination,” Michel added.

European Commission President Ursula von der Leyen admitted that “we have a long road ahead of us, in order, ultimately, to reach a result.”

But she also warned that if Europe doesn’t complete all the lengthy procedural steps needed by the end of the year, “we will have no budget, we will have no Erasmus program, no resources for research, no resources for regional development or border protection.”

However, Michel did not say when he would convey a new summit to try to reach an agreement among the 27 on the seven-year budget.

Squaring the circle

Leaders struggled to square the circle of including more priorities in a tight budget with fewer funds for the next period.

The EU will lose between €10 and €12 billion annually (€75 billion for the whole period), as a result of the UK’s departure. Still, member states have added the digital agenda, fight against global warming and migration control as new priorities.

But the “Frugal Four” refused to increase their transfers to the EU coffers while the recipients of the main envelopes (Agricultural and Cohesion) did not want to slash more these policies, representing currently around two-thirds of the entire EU budget.[...]

Full article on EurActiv

Related op-ed in POLITICO: Mario Monti: Don’t let the ‘frugals’ rule the budget

Related analysis on Bruegel: A Radical Way Out of the EU Budget Maze

Related column on Financial Times: EU ‘frugals’ will struggle to sustain hardline budget stance

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