June 16, 2021

The EU faces a long and arduous summit to negotiate its 2021-2027 budget



The Heads of State and Government of the European Union (EU) on Thursday hold a summit aimed at agreeing their financial perspectives for the next seven years, a negotiation that could continue until the weekend to try to close the gap between countries that They ask for more and less funds.

The meeting starts without guarantees of reaching an agreement and based on a proposal that cuts agricultural and cohesion funds, the fundamental items for Spain.

The multiannual financial framework (MFP) sets the spending limit that may be made by the community bloc between 2021 and 2027 to finance all its policies and programs, as well as the sources of revenue from the budget, which draws primarily on the contributions made by the Member states based on their wealth.

The agreement that leaders must forge will determine the future of community aid for agriculture and fisheries, support for the poorest regions, European investments in research, SMEs or infrastructure, border control missions or the Erasmus program, among others .

The 2021-2027 budget will be marked by Brexit, which leaves a hole of about 75,000 million euros for the seven years, and the need to finance new priorities such as the fight against climate change, digitalization or security management and immigration.

The outcome of the negotiations will define the future ambition of a dwindling EU in an increasingly hostile global environment, the European Commission and Parliament insist.

And, nevertheless, the accounts that will come out of the negotiation will be, unless surprise, inferior to those of 2014-2020.

The proposal presented after a marathon of meetings with the Prime Ministers of the Twenty-Seven by the President of the European Council, Charles Michel, sets the expenditure at 1.09 billion euros, the equivalent of 1.074% of the gross national income (GNI) joint .

To pay for it, each country would have to pay an average of 78 cents per citizen per day, according to the Commission.

The volume of the proposal for 2021-2027 is less than 1.16% which represented the previous framework (2014-2020) for the Twenty-seven, as well as 1.11% requested by the Community Executive for the current budget and 1, 3% claiming the Eurocamara, which considers Michel’s proposal unacceptable.

“The states are going through tight budgets, so realism is needed, and this starts with a reasonable volume,” a senior European official said on Wednesday to defend the plan of the president of the Council.

“FRUGAL” COUNTRIES AGAINST “FRIENDS OF COHESION”

The proposal, for now, does not convince anyone.

On the one hand there are the countries baptized as “frugal” -Holland, Austria, Sweden, Denmark and Germany-, who want to reduce the amount to 1% of the joint national income and keep the discounts from those who benefit from providing many more funds of those who receive.

On the other are the “Friends of cohesion”, sixteen countries, especially in the south and east, including Spain, which advocate bringing it closer to 1.11% as requested by the Commission and maintaining the level of aid for agriculture and cohesion, that benefit the poorest regions.

Michel’s proposal foresees a 14% cut in Common Agricultural Policy (CAP) funds and 12.1% in cohesion funds with respect to the current budget, although these “traditional” items would continue to cover 60% of the budget.

Among the increases, the security and defense endowment is multiplied by six, the funds for border management and immigration are doubled, the IvestEU community investment program rises 184% and Erasmus + 55%.

Michel also proposes that discounts to net taxpayers be phased out now that the United Kingdom is not the architect of the system.

For Spain “the hard core of the negotiation is played in CAP and cohesion,” according to diplomatic sources. The Spanish priority in the negotiation will be agriculture, with the particular objective of avoiding the 10% cut planned for direct aid.

Spain, which could become a net contributor to the budget for the first time, also wants to completely eliminate discounts.

“There could be agreement if some change their radical positions, but you still have to give them a little more time,” the sources said.

Apart from the endowment, Michel’s proposal envisages linking the receipt of funds to the rule of law, although it hardens the majority necessary to take action if a country fails to comply with the Commission’s initiative, which it has not liked in Some capitals.

Both the Commission and Parliament insist on the need for an agreement as soon as possible to avoid reaching 2021 without a budget, a “nightmare scenario”, in the words of a high would work, because the payment of many programs would be blocked.

Once there is a pact, it will have to be negotiated with the European Chamber, which has the right of veto.

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