Member states reject adding €50 million for Brexit preparedness

Lorries pass through customs checks at the Port of Dover in Dover, Britain, 15 February 2019. [EPA-EFE/NEIL HALL]

EU member states refused the European Commission’s request for an additional €50 million to deal with a no-deal Brexit, as the national governments are refusing to increase the overall budget for 2020.

The 28 member states and the European Parliament negotiators started on Friday (15 November) a crucial round of negotiations to try to seal a deal on the EU draft budget for next year.

The co-legislators were at loggerheads as they disagreed over the “unprecedented” increase the MEPs requested for next year, Finland’s rotating presidency of the EU noted.

As part of the cuts, the capitals want to scrap the additional funds requested by the Commission to deal with the consequences of a UK’s disorderly withdrawal from the EU.

The EU executive proposed an initial €50 million to cover “serious financial burden inflicted” on member states as a consequence of a chaotic Brexit.

As the likelihood of a disorderly departure increased days before the expected Brexit date of 31 October, the Commission proposed an additional €50 million on 15 October, totalling €100 million.

But before the conciliation talks started on Friday, Finnish state secretary at the Ministry of Finance, Kimmo Tiilikainen, said that the Commission was “aware” of the member states’ opposition, and therefore the €50 million increase “must be removed” from the Brexit preparedness fund.

This additional money would have been channeled through the EU Solidarity Fund, amended to tackle the negative consequences of a no-deal Brexit.

EU globalisation adjustment fund should cushion Brexit consequences

On Monday (21 October), the European Parliament voted in favour of using funds from the Globalisation Adjustment Fund (EGF) in the event of a hard Brexit to help workers of the remaining EU-27 who will have lost their jobs as a result of the UK’s withdrawal. EURACTIV Germany reports.

“Unprecedented” increase

The diverging positions between the Council and the Parliament were particularly acute this year, as MEPs asked for an “unprecedented” increase in relation to the Commission’s spending level set at €168.3 billion (1.3% more than in 2019).

The gap between the Council and the Parliament’s positions was around €4.2 billion.  While the member states proposed to cut the payment level by €1.5 billion, MEPs were pushing for an increase of €2.7 billion.

Budget Commissioner, Gunter Oettinger, told the member states’ envoys before the conciliation talks started on Friday that both sides needed “to be willing to compromise” to achieve “significant progress” to allow for the conclusion of the talks on Monday at the latest.

EU legislators split over 2020 budget, risk climate funding delays

European Union governments on Wednesday (23 October) rejected EU lawmakers’ plans to increase the bloc’s spending next year, sparking a row that could delay funding on climate and research projects.

Both sides disagreed on most of the expenditure envelopes, including Agriculture, Cohesion, Security and Citizenship, Global Europe, and Administration.

Oettinger told member states that they were not giving “any leeway” for the talks with the Parliament.

Stick to the position

But among the member states there was a strong consensus to stick to the Council position agreed in September.

However, while some countries considered that the compromise text went in the wrong direction, further away from the capitals’ position, some were willing to be more flexible.

“It is very unfortunate that the compromise is moving in the wrong direction to the Parliament rather than in the direction of us,” said Max Elger, Swedish State Secretary to the ministry for Finance. “We need to move closer to the position of the Council in order to finalise this process,” he added.

“It represents a good balance of the current priorities and the real needs,” Bulgarian ambassador to the EU Dimiter Tzantchev insisted.

“We think that the Council has adopted a clear position, it is very balanced,” said French EU ambassador Philippe Leglise-Costa, who called on the Finish presidency to stand by this position during the conciliatory meeting.

Other member states including Portugal, Romania, Poland, Slovenia or Slovakia proved to be more flexible.

“We would like to stick to the Council position,” said Peter Javorcik, Slovakian ambassador to the EU. “However, we would also be ready to explore some avenues where the Council position might be improved in order to have a deal tonight.”

“We need to reach a compromise with the Parliament and we need to do that on the basis of the changes proposed. This can prove that we can have a prudent budget not only for 2020 but later years as well,” added Nuno Brito, Portugal’s representative to the EU.

Some countries welcomed the Parliament proposal to frontloading payments for the European Fund for Strategic Investments.  “In line of the increasing risks of reaching a global ceiling of payments in the first two years of the next multiannual financial framework, it would be reasonable to advance these payments now,” argued Piotr Nowak, Polish deputy secretary of state for the Finance ministry.

The Parliament’s request for a more ambitious budget does not come just by chance. The 2020 blueprint is the last budget of this programing period and the negotiations for a new EU long-term budget remain stuck at the Council.

“If we don’t have an agreement on the MFF, the first year will be a repetition of 2020,” Jan Olbrycht, co-rapporteur of the Parliament for the EU-long term budget told EURACTIV. “This is why 2020 is so hot,” he said.

Summit concludes with no progress on EU’s long-term budget

EU leaders failed to narrow their differences over the EU’s seven-year budget for 2021-27,  the Multiannual Financial Framework, as member states maintained their entrenched positions on the EU’s spending volume and priorities. 

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