Parliament insists on revisiting budget cuts despite Michel, von der Leyen charm offensive

European Commission president Ursula Von der Leyen, European Council chairman Charles Michel and European Parliament head David Sassoli meet ahead of the extraordinary session to debate the recovery plan the EU27 backed earlier earlier in July. [Philippe Buissin/European Parliament]

The presidents of the European Council and Commission mounted a charm offensive on Thursday (23 July) to gain the European Parliament ‘s support for the recovery plan agreed earlier this week by the EU27 but lawmakers insisted on renegotiating the budget cuts. 

“We now have the chance to achieve something historic for Europe together,” Commission President Ursula von der Leyen told MEPs. The agreement is “fair, balanced and groundbreaking”, added Council President Charles Michel.

However, while EU lawmakers recognised that the moment is historic, this “cannot prevent us from seeing what’s on the table,” warned the leader of centrist Renew Europe group, Dacian Cioloş.

EU leaders agreed on Tuesday (21 July) on a massive recovery package, including a reformed €1.074 trillion budget and a €750 billion recovery fund, that will be funded by borrowing money from international financial markets. The Parliament has to give its consent.

During a debate with Michel and von der Leyen, MEPs voiced regret that the deal was reached at the expense of a much more ambitious EU budget, leaving behind key future-oriented policies such as investments in innovation and research or the Just Transition Fund, all of which suffered hefty cuts in the latest proposal. 

Green co-chair Philippe Lamberts openly blamed the new gaps on the ‘frugal states’, Austria, the Netherlands, Denmark and Sweden, as well on Poland and Hungary, who he said see the EU as a “money pump.” 

The need for unanimity in Council decisions, Lamberts said, left the rest of the governments “at the mercy of the extremists”.

Parliament threatens to withhold consent on budget cuts, potentially delaying recovery plans

The European Parliament will adopt a critical stance against the European Council’s recovery plans on Thursday (23 July), opposing cuts to EU-funded programmes in the bloc’s long-term budget while also hitting out at the alleged ‘weak’ nature of rule of law conditionality.

A pill difficult to swallow

Von der Leyen admitted that “this lean MFF (Multiannual Financial Framework) is a difficult pill to swallow,” but asked EU lawmakers to “look at the bigger picture” and defended the “massive, unprecedented financial power” the agreement on the recovery plan has brought. 

“From where we started, this is an enormous achievement. And it is big enough to make an enormous difference,” she said but fell short of convincing MEPs.

“We are not willing to swallow the ‘bitter pill’ yet,” replied European People’s Party Group leader Manfred Weber, who also reminded those who fear that no consent from the Parliament could delay the approval of the recovery plan that the first MFF proposal was put on the table back in May 2018.

“Don’t tell us about delaying things,” Weber stressed, arguing that the EU is a parliamentary democracy and MEPs therefore have to have a say on the bloc’s expenditure plans.

Socialist and Democrats leader Iratxe García insisted that they cannot accept budget cuts “at a time when we need to strengthen our strategic autonomy and reduce disparities between member states” and that “the Parliament will negotiate on equal footing with the Council”. 

Climate policy endures rough EU budget summit

EU leaders agreed to slash funding for Just Transition policies at a crucial budget summit on Tuesday (21 July) and also watered down a set of green conditions that could hamper the bloc’s long-term climate efforts.

A question of values

EU lawmakers criticise not only the size of the budget or the share of loans and grants but also the lack of a clearer roadmap for own resources needed to repay the debt raised to build the recovery fund. 

However, one of the key elements of the deal MEPs did not appreciate was that EU27 also loosened the link between upholding democracy and the rule of law and having access to EU funds. 

In the final text, there is a mere reference to the impact of the financial interests of the Union.

President Charles Michel defended the agreement and said that “we had a very long debate, we looked at one another and discussed face to face the rule of law.” 

He said the agreement does set up a strong link between EU values and funding but EU lawmakers were not impressed.

Cioloş demanded “not a declaration but the actual means on the ground” and clear provisions on rule of law, “to make sure EU money is not financing politicians who are turning their backs every day on European values,” a veiled reference to Poland and Hungary, which have been in Brussels’ crosshairs for breaching fundamental rule of law values.

“Values cannot be traded for a few billion,” United Left (GUE/NGL) co-chair Martin Schirdewan said. 

In a move that has become only too common, as Renew Europe’s Sophie in ‘t Veld pointed out, Michel and von der Leyen left the hemicycle before the conclusion of the debate. 

Before leaving though, Michel took the floor one more time and admitted that the leaders’ decision is only the start of a long road, with a lot of hard work ahead “to transform this agreement on paper” into a real-life project, and he welcomed the Parliament’s involvement in this process. 

Sacking at Hungary media site fuels press freedom fears

In today’s edition of the Capitals, find out more about state-owned rail firm SNCF potentially receiving a bailout, Slovakia’s parliament holding a special session to dismiss the current prime minister, and so much more.

[Edited by Zoran Radosavljevic]

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