Irish Times view on EU budgetary gridlock

Leaders may have to spend next weekend in a very European negotiating lockdown

The budget is not just about money, but the shape of the EU in years to come

The budget is not just about money, but the shape of the EU in years to come

 

When EU leaders roll up in Brussels on Friday for their first face-to-face gathering in months their agenda will be wearily familiar – the EU 2021-27 budget (MFF). We’ve been here before several times on this MFF, tied up in the inevitable gridlock of a monumental argument about money that requires unanimity from net contributors and recipients alike. It is now compounded by the need to find some €750 billion more for the coronavirus recovery fund, and to agree on how it should be distributed. Leaders may have to spend the full weekend in this very European lockdown.

Following a series of meetings with each of the leaders, European Council President Charles Michel on Friday delivered his latest “negotiating box”, his best guess on a compromise package. Built around longstanding budget proposals from the commission, incorporating Franco-German ideas on the recovery fund, and a rake of sweeteners for disgruntled member states, his budget totals a much expanded €1.074 trillion.

Michel has largely accepted the argument that cash should be paid out in the form of grants rather than loans

Among the changes in his latest box is an important concession to countries like Ireland and Belgium which will be most affected by Brexit, a €5 billion special fund likely to be dipped into if the UK-EU talks produce no agreement.

Michel has abandoned attempts in previous drafts to abolish controversial budget rebates for Denmark, Germany, the Netherlands, Austria and Sweden, a legacy of Mrs Thatcher’s British rebate. And he has made significant concessions to the frugal four – the Netherlands, Austria, Denmark and Sweden – who have been pushing hardest against any increases in spending, by proposing significantly enhanced conditionality on how money will be paid out from the recovery fund. Member states will set out national reform programmes which will require to be approved by their fellow member states.

But Michel has largely accepted the argument that cash should be paid out in the form of grants rather than loans to ensure that those most afflicted are not crippled by further unsustainable debt.

And he has avoided strong political conditionality on rule of law issues except where it comes to proper management of the budget.

With net contributors to the budget, led by Germany with the zeal of a convert, reluctantly forced to acknowledge the need to up their contributions, much of the discussion is likely now to focus on getting value for money and proper accountability. Dutch PM Mark Rutte, the de facto leader of the frugal four, is reported to have presented European leaders with a quid pro quo: the price for greater financial solidarity is greater involvement in your national affairs by the rest of the EU. That is not going down well in states like Greece, Italy and Spain.

The budget is not just about money, but the shape of the EU in years to come.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.