Huge differences in national negotiating positions means that clinching a deal on the EU’s next long-term budget “is not going to be easy”, said Valdis Dombrovskis, the European Commission’s economy chief.
Dombrovskis noted that current debate is dominated by “how to cut” the Commission’s proposed €2 trillion spending programme for 2028 to 2034.
Several “frugal” Northern member states, including Germany, the Netherlands, and Sweden, are urging even deeper reductions than the 2% cut suggested by Cyprus, which holds the rotating EU presidency, earlier this month.
“I’d say our proposal is ambitious but realistic,” Dombrovskis said an event hosted by the House of the Euro on Monday evening.
“But what we see now, [the] debate among member states, it’s not so easy. Basically, the debate is going into the direction of how to reduce the size of the budget we proposed. The Cypriot presidency proposed a negotiating box with some modest cuts in [the] budget, and some member states were harshly criticising it saying it’s not a ‘nego-box’, it’s a no-go box.”
He added. “So it’s not going to be easy.”
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Dombrovskis further suggested that difficulties in agreeing on the budget – formally known as the Multiannual Financial Framework (MFF) – are being compounded by the European Parliament’s call for a 10% increase and the exclusion of Covid-era debt repayments from the core budget. MEPs must ratify the MFF once capitals have reached an agreement.
“The debate in Parliament goes [in the] opposite direction,” Dombrovskis said, adding that EU executive’s proposed debt repayments amount to €24 billion per year from 2028.
The idea of deferring the debt repayments of the €650 billion recovery fund, which is financed through common EU borrowing and was agreed in 2020, has gained traction in capitals in recent weeks.
France and cohesion-friendly countries are in favour of delaying payments to free up funds for investments in defence and competitiveness at a time of strained national budgets, but fiscally conservative countries like Germany and the Netherlands are pushing back.
Countries could choose to defer payments into later spending cycles as the repayment timeline stretches until 2025, but any change would need unanimous agreement. Dombrovskis said the EU executive was aware that the repayment is “one of the elements in discussion”.
Thomas Moller-Nielsen contributed reporting.
Source:
www.euractiv.com