Parliament ready to flex its muscles over EU budget in wake of Brexit

General view on the plenary chamber in Strasbourg after the departure of the UK MEPs [European Parliament]

Ahead of an EU27 summit on Thursday, the European Parliament is mounting pressure on the member states to agree on an ambitious budget for the bloc, demanding a bigger say in decision-making in the aftermath of Brexit and threatening to reject the bloc’s key financial instrument.

With the departure of the UK, the Union lost one of its biggest financial contributors and a political heavyweight. As the bloc enters a period of reflection about its own nature, the Parliament has stepped in to demand a bigger say on EU policy, starting with the budget.

“It is not that the members of the Parliament want to have strong ambitions, the members of the Parliament want to take part, they want to be involved,” EPP MEP and co-rapporteur for the EU’s long-term budget, Jan Olbrycht, told reporters on Wednesday.

“This Parliament is learning, we took the lesson from last time,” he added, stressing that this time is different because the EU is different, as a consequence of Brexit. “It is not about money,” the Polish MEP said.

Nevertheless, MEPs believe the Council has understood the change in the political dynamic, hence the attitude of Council President Charles Michel, who has actively sought to learn from the Parliament’s position on the matter.

“We have appreciated the way in which President Charles Michel has engaged us over the past two months. The same compliment goes to the Croatian presidency. And that’s more or less where the good news stop,” Johan Van Overtveldt, ECR MEP and chair of the Committee on Budget, told reporters.

“The proposition we have on the table today cannot pass in the Parliament,” he warned. And on this, a strong majority of EU lawmakers are on the same page. 

It is not the first time the European Parliament has threatened to tear down the budget or oppose the election of a European Commission president. This was the case when the Spitzenkandidaten system was bypassed in favour of Ursula Von der Leyen as Commission president. 

Still, EU lawmakers have not yet dared to challenge the Council. “We have never (before) rejected a French Commissioner candidate,” a parliamentary source told EURACTIV in reference to the rejection of Sylvie Goulard, warning that this time they are serious.

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Unlike national governments who adopt budgets every year, EU finances cover a seven-year period and need to be agreed by all 27 member states. The bloc’s next budget, the first after Brexit, will be debated by EU leaders on Thursday …

Threats not welcomed 

The European Commission has been raising the spectre of the “horror scenario” in the face of the Parliament budgetary threats. EU sources have warned that member states will stop receiving funds if there is no agreement by the end of this year. 

“We’ve been asking for months now for a contingency plan,” Van Overtveldt explained, precisely to avoid such scenario. If the Commission decides not come up with an alternative blueprint in case of no deal, “that’s their responsibility.” 

Olbrycht explained that the treaties allow for the budget to be replicated if there is no agreement. However, the regulation of the programmes will expire and would need to be updated, and that legislation requires a co-decision between the Parliament and the Council.

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In today’s edition of The Capitals, find out more about how the EU member states reacted to European Council President Charles Michel’s more ‘flexible’ EU budget proposal.

Leaders not impressed  

But the ‘frugal countries’ (Sweden, Denmark, Austria and the Netherlands) are not impressed by the Parliament’s warnings. Asked about the MEPs’ warnings, an EU diplomat said that “now we are concentrated on reaching an agreement between the EU leaders.”

For this group, the top priorities are to bring the budget down to 1% of the EU’s GNI and maintain the rebates, the money they get back as compensation for the low return in other budgetary policies.

The group is ready to fight tooth and nail to secure both goals. “Our plan A is 1% and the rebate, and that’s our plan B too”, the official stressed.

For these countries, Michel’s proposal continues to be “too much for us to agree with”. For example, they would like to cut additional €70-80 billion, of which €30 billion could come from cohesion.

Moreover, they warned that if new own resources are incorporated into the MFF, they will have to be discounted from the national contributions. 

The Parliament, on the contrary, considers that neither the Commission’s nor Charles Michel’s proposal is enough to match the EU’s ambitions and the policy priorities member states set for themselves.

Despite all the outstanding issues, the European official said an agreement was still possible this weekend, or it should come rather “soon”, although he prioritised content over speed in the complex negotiation.

Parliament President David Sassoli is invited to present the EU assembly’s view at the start of the meeting but after that, it’s up to member states. “As soon as there is an agreement at the European Council, there should be contacts with the European Parliament to ensure its consent,” an EU source said.

But the Parliament warned that then it will be time to negotiate. EU leaders have been advised to clear their weekends, just in case. 

Pressure mounts on EU leaders to reach MFF deal within days

The tight calendar, the urgent priorities awaiting the EU and the risk of post-Brexit talks affecting the negotiations are adding pressure on EU leaders to reach an agreement within days on the bloc’s long-term budget. Otherwise, a senior EU official warned, Europe risks facing a “horror scenario” in January next year.

[Edited by Zoran Radosavljevic]

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