European Union in chaos over $81-B budget loss

Cornelia Mascio
Febbraio 21, 2020

German Chancellor Angela Merkel on the eve of the summit predicted "very tough and hard negotiations" around the table.

"I will take all the time that is needed to get an ambitious agreement that defends the interests I represent", he said, insisting that with "a spirit of compromise and ambition" a deal could be found.

The whole seven-year budget amounts to around €1 trillion or about one percent of the gross national income of the 27 nations combined.

He added it would be "unacceptable for Europe to compensate for the British departure by reducing its means". "This could take several hours, several nights, several days".

The talks expose differing priorities of countries in the north and south, the east and west, and the more developed and less advanced economies.

"A third (of the budget) is still for agriculture, a third for cohesion".

One EU diplomat said on Friday morning: "He wanted enough cash to buy a Range Rover, we only have the money for a Volkswagen - and worst of all he asked Mutti [the German chancellor Angela Merkel] to pay for the Range Rover".

In comments after the plenary session ended on Thursday night, Maltese Prime Minister Robert Abela said talks will continue until leaders either decide that no agreement has been reached and the meeting adjourns to another summit, or conclude talks and close the chapter.

"New areas of spending, like research or migration, defence or innovation are important policy areas, but they can not be at the expense of cohesion and the common agriculture policy", said Polish Prime Minister Mateusz Morawiecki.

It spends money on subsidies for European Union farmers, on equalising living standards across the bloc, border management, research, security and various foreign aid programmes.

Ahead of the summit, the frugal four, who would like the budget to drop to as low as 1% of gross national income, rejected Michel's offer in a Financial Times newspaper op-ed, saying that in light of Brexit "we simply have to cut our coat according to our cloth". Germany, the biggest contributor, is prepared to accept a bit more, but 1.07 per cent is too high for Berlin.

The parliament wants 1.3%, while the EU's powerful executive arm, the European Commission, prefers 1.11%. "We are fine with being net payers, but we can not accept a dramatic increase in our fees - that is out of the question", Swedish Prime Minister Stefan Lofven told reporters.

The legislature, which has to sign off on the final MFF, believes more money can be raised from EU-wide taxes on plastics and on the carbon emissions trading scheme.

Officials warn that without a deal by the end of the year, the bloc will have to freeze most of its projects from 2021.

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