EU budget: First post-Brexit test seems to be tough for Europe

Today's edition is focusing on the positions of several member states on the EU budget 2021-2027 ahead of the crucial extraordinary EU summit on Thursday (20 February). [EPA/ JULIEN WARNAND]

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Today’s edition is focusing on the positions of member states on the EU budget 2021-2027 ahead of the crucial extraordinary EU summit on Thursday (20 February). EU Council President Charles Michel has already tabled a proposal and the talks are expected to be tough and long.

Before you start reading today’s Capitals, we invite you to read “EPP coup: Orbán sends memorandum to party leadership“, by Vlagyiszlav Makszimov.

Also read “Europe’s oil dependency to stick to transport up to 2030“, by Sarantis Michalopoulos.

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BERLIN

Proposed budget a “step backwards”. German Finance Minister Olaf Scholz (SPD) has sharply criticised European Council President Charles Michel’s proposal for the next multiannual budget (MFF), calling it a “step backwards” and lamenting the lack of “modern policies.” In particular, Scholz emphasised the need to tax multinational internet companies, which is not mentioned in the current budget proposal. Despite these criticisms and its usual presence among the ‘thrifty’ net contributor countries, Germany has indicated that it is willing to contribute more than 1% of its gross national income (GNI) to the budget. (Sarah Lawton | EURACTIV.de)

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PARIS

Enough is enough. “We are tired of giving money that is then redistributed as a rebate to other countries around us,” said Secretary of State for European Affairs Amélie de Montchalin (LREM), ahead of the extraordinary summit on the long-term budget. The French government is hoping that Brexit will pave the way for the withdrawal of rebates granted to Germany, Denmark, the Netherlands, Austria and Sweden.

“France is a net contributor, we contribute more to the budget than we receive, but we want to pay for Europeans, for concrete projects, for tangible beneficiaries,” Montchalin stressed. “We have a very firm position on this issue, we must see this mechanism come to an end,” she added. (EURACTIV.FR)

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VIENNA

Cautious approval of Michel’s EU budget proposal. The proposal put forward by European Council President Charles Michel “goes into the right direction”, said Austrian EU minister Karoline Edtstadler (ÖVP). Austria still demands that its budget contributions benefit from rebates, “as compensation for the fact that we, as the now third-biggest net payer, give more than we get”, the minister said. Without the rebates, Austria would become the second-biggest net payer, she added. EURACTIV Germany’s Philipp Grüll reports.

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HELSINKI

Building a budgetary bridge. Finland is now adopting the role as mediator between the so-called ‘frugal group’, which wants the budget to be set at 1% of member state’s gross national income (GNI), and the ‘Friends of Cohesion’ who want the wealthier countries to contribute more and consider the cuts to be too significant. Now that the UK has left the EU, Finland wants a budget worth 1.06% of the EU’s GNI and hopes the rebates from which certain countries benefit, will be ditched. EURACTIV’s Pekka Vänttinen looks into why.

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DUBLIN 

Irish farmers hit out at CAP cuts. Several leading farm lobbies in Ireland have hit out at the proposed cuts to the Common Agricultural Policy (CAP) in the EU’s Multiannual Financial Framework (MFF), saying that the country’s farmers could be some of the worst-hit from the funding shortfall. Recent Council documents reveal that the CAP could be in for a 14% cut in funding. EURACTIV’s Samuel Stolton has more.

 


EUROPE’S SOUTH

ROME

A lack of ambition. While Italy’s Economy Minister Roberto Gualtieri expects “intense” discussions to ensue at the extraordinary European Council summit, he believes that the ‘flexible’ budget proposal penned by President Charles Michel lacks ambition. For EU Affairs Minister Vincenzo Amendola, Michel’s proposal is not sufficiently adequate to meet the EU’s future challenges. “Our red line was being ambitious,” he said, adding that the Commission’s proposal was far more ambitious compared to the current one. (Gerardo Fortuna | EURACTIV.com)

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MADRID 

EU budget proposal ‘unfair’ and ‘insufficient’. Charles Michel’s proposal is not enough for an agreement, Spanish Foreign Minister Arantxa González Laya warned on Monday (17 February) in Brussels. Not only does Spain consider Michel’s ‘flexible’ proposal to be “insufficient” for the EU’s geopolitical aspirations, it also believes that it is “unfairly distributed,” and fails to address inequalities within the Union resulting from the 2008 financial crisis, González Laya argued. 

Madrid is especially concerned about the proposed cuts to the Common Agricultural Policy (CAP), as farmers have been demonstrating in the country for weeks. Michel’s proposal, the minister said, “does not recognise the role of agriculture as a tool for cohesion and as a key element in the green transition.” (Beatriz Rios. EURACTIV.com)

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ATHENS

Puzzled over budget. Greece does not believe that Michel’s proposals are ambitious enough to deliver EU citizens’ demand for “more Europe”. “The proposals do not earmark more money to cohesion and farmers. We are here to fight to ensure that Greece gets the most out of a limited budget due to the absence of the United Kingdom,” said Deputy Foreign Minister Miltiadis Varvitsiotis.

However, Greece also wants to ease the burden of migration considering that it’s a frontline EU country and therefore, also seeks more money to handle a critical migration situation. (Sarantis Michalopoulos | EURACTIV.com)

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LISBON

Portugal refuses EU’s budget plan. Portuguese Prime Minister António Costa said on Tuesday (18 February) that he would not accept the European Union’s budget proposal, but refused to veto it, arguing instead for a constructive approach of not giving in to the “four cheapskate countries” that defend underfunding. The social partners, which include the representatives of workers and employers, also opposed the proposed cuts in the EU’s budget proposal after an extraordinary meeting with the Portuguese government on Monday (17 February). (Maria de Deus Rodrigues and Vanda Proença, Lusa.pt) 


VISEGRAD

WARSAW

Expectations vs reality. “The European Union needs a budget in the spirit of solidarity. We want Europe as a global player”, wrote Prime Minister Mateusz Morawiecki in an article published on Tuesday (18 February) in Die Welt. However, as European Affairs Minister Konrad Szymański remarked after attending the Monday meeting in Brussels, there are still fundamental differences between member states over EU spending for the next multiannual financial framework between 2021 and 2027. Poland belongs to the group of countries that wants the most generous budget possible and opposes cuts in the EU’s Cohesion Policy and Common Agricultural Policy (CAP).

EURACTIV Poland’s Mateusz Kucharczyk looks into what else the European Affairs minister had to say.

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PRAGUE

Michel’s EU budget proposal not well-received in Prague. “We can see some improvements in the proposal, but still we cannot consider it to be balanced,” said Czech ambassador to the EU, Jakub Dürr, after yesterday’s European Council meeting. Czech PM Andrej Babiš refuses the cuts proposed for the Cohesion and Common Agricultural Policy (CAP) and believes the EU can save money by eliminating rebates, for example. On top of that, the PM does not support the idea of increasing the bloc’s budget with own resources. (Aneta Zachová | EURACTIV.cz)

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BUDAPEST

‘We want a fair budget’. Hungary has not yet reacted to the new EU budget proposal. Previously, Prime Minister Viktor Orbán called for the EU budget to be put on a “fair footing”, adding that it currently includes amendments that shift monies from poorer to richer member states.

“We want a fair budget. Once we have that, Hungarians will find what they want; a combination of figures that work in their favour,” the PM added. Orbán seemed sceptical that real progress could be made during the special EU budget summit on 20 February, adding that “the quality of the budget is more important than the date of its adoption”. (Željko Trkanjec | EURACTIV.hr, Vlagyiszlav Makszimov | EURACTIV.com)

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BRATISLAVA 

More or less for Erasmus+. Charles Michel’s compromise plan has in no way affected the main priorities of the Slovak government on the 2021-2027 EU budget. The Slovak Ministry of Foreign Affairs František Ružička, who participated in the Monday General affairs council (GAC), made no direct reference to Michel’s proposal calling for a budget set at 1,074% of the EU’s GNI. He reiterated that Slovakia would keep fighting for its priorities: a strong Cohesion and Common Agricultural Policy. EURACTIV Slovakia’s Marián Koreň has the story.

 


THE BALKANS

BUCHAREST

Romania wants ‘an ambitious budget’Bucharest is unimpressed with the EU budget proposal, saying, however, that it remains a good basis for the negotiations to be held during the extraordinary summit scheduled for Thursday (20 February). In addition to the country’s hope that rebates are eliminated, President Klaus Iohannis reiterated Romania’s support for an ambitious budget, “preferably at the level proposed by the European Commission, considering the setting of new, more ambitious targets”, as well as the country’s. EURACTIV Romania goes into detail.

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SOFIA

New initiatives should not be at the expense of traditional policies. Bulgarian Prime Minister Boyko Borissov was in Brussels on 5 and 6 February to discuss the MFF with Commission President Ursula von der Leyen and Council President Charles Michel. Speaking to journalists, he provided some insight of Bulgaria’s expectations from the MFF.

Bulgaria is giving its blessing to the Green deal, but at the same time it insists that “traditional” EU policies such as cohesion should not be downgraded. Georgi Gotev has more detail.

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LJUBLJANA 

Slovenia prepared to block the EU’s budget deal. “Our goal is to minimise the reduction of funds. Slovenia will insist on its positions. If it is necessary to block the deal, we will also go that far,” said acting Prime Minister Marjan Šarec. (Željko Trkanjec | EURACTIV.hr)

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ZAGREB 

Budget bonus for Croatia? Croatian Prime Minister Andrej Plenković hopes that Croatia, as the newest EU member state, could obtain a bonus due to it only having benefited from one full multi-year financial cycle thus far. The financial envelope, as well as the criteria for using the funds (participation in financing to stay at 15% as well as N+3), are also critical to Croatia. (Željko Trkanjec | EURACTIV.hr)


In other news from the capitals…

BERLIN

In other news, Thuringia’s Christian Democrats (CDU) rejected leftist Bodo Ramelow’s plan to set up a transition government under CDU leadership. The state’s CDU rejected the proposal of Thuringia’s former Minister-President Ramelow’s of Die Linke to create a 70-day transition government under the leadership of Christine Lieberknecht (CDU), who was the state’s Minister-President from 2009 to 2014. EURACTIV Germany’s Sarah Lawton digs deeper.

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MADRID

Collection of Google tax ‘delayed’. Spain’s Council of Ministers approved a national digital services tax known as the “Google tax”, as well as a financial transactions tax on Tuesday (18 February), EURACTIV’s partner EuroEFE reported. However, in an attempt at mitigating  US anger, the Council of Ministers decided to delay the collection until December this year. Read the full story in English here.

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DUBLIN

Fine Gael accused of “game-playing”. The Social Democrats decided to cancel a meeting with Fine Gael following a statement from Varadkar on Monday (17 February) evening that his party is prepared to enter into opposition in the new Irish Parliament. 

“While it was always the case that we were unlikely to find much common ground with Fine Gael, we intended to honour our commitment of engaging openly with all parties,” a statement from the Social Democrats read. “Clearly Fine Gael’s intention is to engage in shadow-boxing for the coming weeks, and we’ve no interest in participating in such a charade.” (Samuel Stolton | EURACTIV.com)

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SOFIA

A step back from ERM II. “We will not force” Bulgaria’s entry into the Eurozone waiting room (ERM II) if the whole nation is not convinced about it, PM Boyko Borissov said late on Monday (17 February). “No country that has adopted the euro has got worse. But the Bulgarians have concerns”, he added. Till now the government was declaring that Bulgaria should join the ERM II at the end of this April. Borissov’s GERB party amended the Currency Law to remove the obstacles, but the way they did it created a serious crisis of confidence. The Bulgarian lev exchange rate is no longer protected by law but is guaranteed by a parliamentary decision. (Krassen Nikolov | EURACTIV.bg)

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BELGRADE

Serbians support children’s decision to leave the country. While Serbia’s citizens are unhappy with the ongoing brain drain and disappointed with the government neglecting the issue, they still back the intention of children leaving the country, according to a report published by research and publishing centre Demostat on 18 Feb. As many as 29% of young people have a strong desire to leave Serbia, while 46% show the intention to go abroad, according to the results of study Youth in Southeast Europe 2018/2019. 

In other news, Serbian Foreign Minister Ivica Dacic said yesterday (18 February) that a silent revision of the Dayton Peace Accords that aims to abolish equality was underway in Bosnia and Herzegovina. In an interview with TV Prva, Dacic described the statement by Bosnian Presidency Serb member Milorad Dodik as “Goodbye Bosnia, welcome Republika Srpska (RS)-exit” as “a political fight”.

“It is not an empty story, but a clear message: ‘If you pursue the policy of jeopardising the equality of the Serb people, you will have problems'”, he said. Dacic also stressed that Belgrade would not allow the abolition of RS.. (EURACTIV.rs)

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[Edited by Sarantis Michalopoulos, Daniel Eck, Benjamin Fox]

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