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Tensions Flare Over Next EU Budget 10/14 06:18
BRUSSELS (AP) -- Political tensions mounted Tuesday over the European
Union's next long-term budget as pressure builds to get the spending package
agreed before a series of unpredictable elections in some of the biggest member
countries next year.
The EU budget, known as the multiannual financial framework, amounts to
around 1.2% of the 27-nation bloc's gross national income. The MFF is financed
mostly by the member countries based on the size of their economies.
The spending plan is the cash point where EU ambitions, conflicting policy
priorities and economic realities collide and must be endorsed by all member
countries and the European Parliament.
The 2028-2034 budget is being negotiated as the EU faces outside challenges
including supporting Ukraine as it fights off the Russian invasion and
remaining competitive in the face of high energy prices and trade tensions with
the United States and China.
Inside the union, elections in France, Italy, Poland and Spain later this
year and next year could test the resilience of the world's biggest trading
bloc, with the hard right leading in opinion polls in France and results in
Poland and Spain difficult to predict.
The EU presidency tables a new proposal
Over the weekend, Ireland, which holds the EU's rotating presidency,
proposed to set the budget at 1.62 trillion euros ($1.81 trillion). That is a
30% increase over the current seven-year package, but 8% less than what the
European Commission wants.
Sweden, one of about eight countries known as net contributors paying more
into the budget than they receive back in allocations, insists "several hundred
billion euros" more in cuts are needed.
"It's wildly unaffordable, and the volume must go down," Sweden's EU Affairs
Minister Jessica Rosencrantz said as she and her counterparts met to chew over
the Irish presidency proposal ahead of an EU leadership summit later this week.
The Irish plan would mean "a 60% increase in the Swedish contribution" that
amounts to "a fee for the Swedish taxpayers to pick up, which limits us to make
the necessary priorities back home," Rosencrantz said.
On Sunday, Chancellor Friedrich Merz of Germany, Europe's biggest economy
and a major net budget contributor, welcomed Ireland's "tireless efforts" but
said "we are still a long way from reaching an agreement."
"The EU budget must be affordable for those who bear the main burden of
financing," said Merz, who will from Thursday join his counterparts in Brussels
for two days of talks. "Everyone must contribute to the necessary adjustments."
Something has to give or money must be found elsewhere
That "everyone" was a reference to countries rejecting cuts to cohesion
funds for Europe's poorer regions, or to agriculture policy, which subsidizes
the continent's farmers. Combined, this money accounts for about two-thirds of
the budget.
Ultimately, if countries aren't willing to stump up more cash, then either
farm or cohesion spending must shrink or Europe's ambitions on defense,
competitiveness and other priorities scaled back. Unless money can be found
elsewhere.
Despite the uncertainty, Ireland's EU Affairs Minister Thomas Byrne thinks
the presidency has laid a good foundation for negotiations in the days and
weeks ahead.
"That was our task, to find that basis," he told reporters in Luxembourg
before chairing Tuesday's meeting. "We weren't asked to find a basis for
agreement. That will come later."
Indeed, most of the parties involved are complaining more or less equally
and none of them have yet walked away, which may be a good sign.
"Nobody's going to get everything that they want. But we hope that there'll
be something there for everybody," Byrne said.
Desperately seeking Europe's 'own resources'
Still, the negotiations are gathering pace just as ambitions for the EU in
an uncertain world are on the rise but room for fiscal maneuver in many
countries is disappearing.
The MFF is tiny compared with national budgets, but France, Italy and
Belgium are mired in debt and oppose paying more.
As a bloc, the EU is not allowed to levy taxes, but does earn revenue from
mechanisms such as customs duties and value added tax. The commission is
looking for new ways to raise its "own resources" through the carbon emissions
trading system and a new tobacco duty, among other measures.
Whatever happens, missing the end of December "deadline" does not mean that
money runs out. Nations have another year, but much time is needed to adopt
legislation on spending programs and approve it all so money can be flowing by
January 2028.
In a letter inviting leaders to the summit, European Council President
Antnio Costa said clinching a "timely agreement" is "essential to provide our
economies with the predictability and stability they need in an unstable and
unpredictable world."
"I count on your leadership and collaborative spirit," Costa wrote.
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