EU budget chief sees deal on bloc’s long-term finances on Monday

European Commissioner for Budget and Administration Johannes Hahn holds a news conference on a new proposal for the EU's joint 2021-27 budget and an accompanying Recovery Instrument to kickstart economic activities in the bloc ravaged by the coronavirus disease (COVID-19) in Brussels, Belgium, 27 May 2020. [EPA-EFE/FRANCOIS WALSCHAERTS]

The European Parliament and the bloc’s national governments are likely to reach a deal on the EU’s €1.1 trillion long-term budget for 2021-2027 on Monday (9 November), the European Commission’s Budget Commissioner Johannes Hahn said.

The long-await agreement will come after negotiators have reached a deal on Thursday on one of the main stumbling blocks – the link between EU money and governments’ respect for the rule of law.

“Today’s agreement will trigger additional dynamics,” Hahn told Reuters. “I would expect a deal on the whole Multi-annual Financial Framework on Monday.”

Germany’s envoy Michael Clauss called Thursday’s deal on the rule of law mechanism “an important milestone in our efforts to finalise the next long-term EU budget and the recovery package”.

He added: “We have a historic €1.8-trillion financial package on the table. With the second wave of the pandemic hitting member states hard, there is no time to lose.”

EU institutions strike budget deal on rule of law mechanism

The European Parliament and the Council representing the EU27 reached a preliminary deal on linking the disbursement of EU funds to rule of law after five rounds of talks, clearing a major hurdle in the wider negotiations on the bloc’s budget.

The “provisional agreement” announced by the European Council overcomes the Parliament’s steadfast refusal to approve the €1.1-trillion EU budget – and another €750 billion in virus relief – unless such a condition was applied.

Germany, in its role holding the rotating EU presidency, had been irked by the European Parliament holding firm on the issue when the virus relief package urgently needed to be unblocked, especially with a second wave of the coronavirus sweeping Europe.

Its officials negotiated with the MEPs on behalf of the 27 member states to reach Thursday’s agreement.

Haggling was now expected to take place on the finer details of working out allocations within the budget.

EU leaders consented to the principle of rule of law conditionality when they held a marathon July summit that agreed the bloc’s unprecedented virus bail-out package of grants and loans.

But MEPs complained that the provision was too vague to ensure that EU countries receiving bloc cash abided by democratic rules – something fiercely opposed by Hungary and Poland.

Budapest and Warsaw have come in for scathing criticism from Brussels for moves seen to erode judicial independence and undermine rules on migration.

Other issues that have delayed an agreement was the Parliament’s demand to increase by €39 billion spending on research and development, education, health and security. EU governments, represented by the German EU presidency, were offering only up to €10 billion.

On Monday, the European Parliament’s economic affairs and budgets committees will decide how to allocate €672.5 billion in emergency coronavirus recovery funds.

A final vote is expected mid-month during the European Parliament’s plenary session.

Council brokers historic stimulus pact as budget cuts, rule of law retreat plague deal

Leaders of the 27 EU countries finally compromised on a €1,074 billion long-term budget and recovery fund instrument early on Tuesday (21 July) morning, but it took one of the longest-lasting summits in European Council history and the final deal cut funding for some of the bloc’s key priorities.

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