EU members stuck over budget proposal

Net contributors seek a cut while beneficiaries want status quo

European Union leaders have failed to reach a deal on a longterm budget after member states failed to narrow their huge differences at a two-day summit in Brussels.

The so-called Frugal Four — Austria, Denmark, the Netherlands and Sweden — which are net contributors to the EU budget, insist on a cut in the 2021-27 budget proposal, but net beneficiaries of the EU budget want to keep the status quo.

It will be the first budget to be agreed on after Britain quit the EU. Britain was a major and net contributor to the budget. Its departure from the EU would leave a shortfall of 60-75 billion euros ($65-81 billion) in the EU’s seven-year budget.

“The last weeks and the last days, we have worked very hard in order to try to reach an agreement regarding the next European budget,” the European Council President Charles Michel told a joint news conference with the European Commission President Ursula von der Leyen on Friday evening.

“Unfortunately, today we have observed that it was not possible to reach an agreement,” said Michel, a former Belgian prime minister who assumed his current job on Dec 1.

“We have worked very hard to try to reconcile the different concerns, the different interests, the different opinions on the table, but we need more time.”

He had held many meetings with individual EU leaders before the summit in an effort to forge an agreement and he had tried his best, he said.

“As my grandmother used to say to me: To succeed, you have to try.”

EU leaders had negotiated with heads of state and government for 48 hours at the summit, Von der Leyen said.

“We need to keep it going, and the work continues without interruption, because we know that we still have quite some way to go to reach a result.”

‘Divided clubs’

Austria, Denmark, the Netherlands, Sweden and some other EU members want the budget to be 1 percent of members’ combined GDP. However, less well off member states and the European Parliament want a more ambitious budget of up to 1.3 percent of GDP. Michel’s proposal was a compromise of about 1.07 percent of GDP, or about 1.09 trillion euros ($1.18 trillion).

The European Parliament President David Sassoli reminded EU leaders at the start of the summit that parliamentary approval was needed for the EU budget, and said MEPs would not accept just any agreement.

“We must equip the union with all the means necessary to address the challenges that we face together. The first and most urgent is climate change. The Green Deal offers an ambitious plan for Europe to become the first carbonneutral continent by 2050. Achieving this will require a major financial effort.”

France’s President Emmanuel Macron has also called for a bigger budget to meet the EU’s growing ambitions but has refused to say how much more France itself is willing to pay, according to Politico.

Macron complained about how EU member states had divided into “clubs” that ended up blocking a deal.

“It’s not a good method to try to divide things by groups. We must remobilize everyone, rebuild some confidence.”

Germany’s Chancellor Angela Merkel admitted that the talks had broken off because “differences are too big”.

“We are going to have to return to the subject,” the BBC quoted her as saying.

EU leaders will now schedule another summit to reach a compromise. If they fail to reach a deal by the end of this year, when the current EU budget runs out, the EU will have to halt its projects.

We must equip the union with all the means necessary to address the challenges that we face together. The first and most urgent is climate change.” David Sassoli, President of the European Parliament