Last week, an EU summit aimed at attempting to agree terms on the seven-year EU budget from 2021 and fill the huge £63billion hole left by Brexit ended in stalemate following a stand-off between “frugal” member states (Denmark, Austria, Sweden and the Netherlands) and other countries. The “frugal four” and 17 other net beneficiary countries including Spain, Portugal, Greece, Poland and Hungary, rejected the compromise proposal put forward by European Council chairman Charles Michel, who wants to cap joint spending at 1.069 percent of GDP. But these net beneficiary countries want more than this, while the frugal four are seeking a maximum of just one percent.
A furious row has also broken out about how the budget should be spent, with the frugal four wanting more money pumped into border controls following the migrant crisis in 2015, as well as funds spend on climate change, security and digitisation.
But beneficiary eastern and southern countries want more money for poorer regions, as well s subsidies for farmers – a move supported by EU powerhouse France.
German Chancellor Angela Merkel admitted talks had collapsed because “differences are too big”, while French President Emmanuel Macron lashed out at countries for “forming blocking coalitions”.
Gert Jan Koopman, the European Commission’s director general for budget, has now warned “time is now of the essence” following the collapse of EU budget talks in Brussels on Friday.
He also attempted to explain how “contributions will increase and receipts will decline” because of the £62billion hole blown in spending from Brexit.
Mr Koopman, as quoted by Politico, has warned even if a compromise is agreed soon, “we are less advanced than we were last time around, which would mean bigger delays” to implementing budget programs.
In a lengthy Twitter post, he wrote: “Historically, #EUCOs on the #MFF have never succeeded first time around. Friday’s lack of success should therefore not be interpreted as a failure as such. But time is now of the essence.
“The #EUCO debate was the first real exchange of views among Leaders based on figures and real arguments. It was an indispensable step in these negotiations.
“It reminded leaders that there is a €75billion #Brexit gap: as a result, contributions will inevitably increase and receipts will decline even at a low level of ambition.
“Policies addressing new priorities such as #climate – about which citizens care the most – should not be singled out to pay this cost even if most Member States fight for their national envelopes.
“On timing: we have a not-so-good solution, a bad solution & a very bad solution. We’re already late.
“A deal on contingency would need mini MFF negotiations, deliver an outdated budget & likely to fail. The #EU may only be left with #CAP, humanitarian aid and foreign policy.
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“Ignore the European parliament at your peril! Negotiators should continue engaging with them in the name of a successful final outcome.”
Mr Koopman warned failure to agree a deal before the end of 2020, when the current Multi annual Financial Framework (MFF) expires, would mean EU spending would be limited to the Common Agricultural Policy, humanitarian aid, administration and the Common Foreign and Security Policy.
He added: “But that would be it. So, no Cohesion Fund, no Erasmus, no modern policies — actually not very much.”
The general director for budget also rejected the idea the European Commission should propose a contingency regulation to avoid the worst-case scenario.
Mr Koopman said: “Such a contingency package would be a mini-MFF negotiation for one year, because all of the issues that are on the table for seven years would be on the table for one year.
“I think it would be rather optimistic to believe that one could easily, in the matter of a few months, agree a mini-MFF package for a year.”
Earlier this week, German politician Manfred Weber accused EU member states of acting selfishly following the collapse of talks last week aimed at agreeing on the seven-year budget.
The head of the European People’s Party said the international community was looking on as European leaders squabble, and warned China and the US, in particular, are keeping a close eye on the absence of agreement at the EU table.
He told the Funke media group in Germany: “It is about selfishness and not about the necessary European ambition.
“The many good ideas for an ambitious Europe are ground up into small pieces.
“China and the USA are happy.
“Approval from the European Parliament will only be given if the direction changes.”
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