Battle for new 7-year budget starts flaring

Commissioner Oettinger urges for sticking to the timetable, first half of 2014 has been waste of time

Guenther Oettinger

Every seven years, the picture of a fierce clash over the long-term budget is almost the same, but now - in the MFF for 2021-2027 - Brexit is amplifying its spread and dynamics. The differences between the Member States are still prodigious and the time to conclude a deal, with no detrimental effects on tens of thousands of farmers, researchers, students, is running out very fast.

The main brawl is on the budget's overall size. A smaller budget is claimed by the Netherlands, Denmark, Sweden and Austria. For 'stable' MFF pleads the Finnish government. As it is indicated in the analyses of the European Parliamentary Research Service, Irish, German and French governments would stomach a larger MFF.

Portugal would support an MFF of 1.2% of EU GNI, for the Czech Republic and Romania an MFF of 1% of GNI is fine, but they are ready to consider a bigger one. Putting in place rule-of-law conditionality is strongly opposed by some Member States while others welcome it. Opinions defer also on the new own resources, on the cuts in the old policies - CAP and Cohesion.

This data reflects an early stage sample, and soon an update will be released. In the beginning of the week at the General Affairs Council, Finland's Minister for European Affairs Tytti Tuppurainen made an overview on what has been achieved so far concerning the MFF negotiations and briefed her colleagues on the Presidency's next steps in this respect.

Ambitious enough to accelerate the speed in the negotiations process, over the summer Finland's Presidency sent out a questionnaire to all Member States and conducted bilateral meetings in early September to identify their priorities and main concerns, Minister Tuppurainen explained. On this basis will be prepared a paper as Presidency input in the preparations for the exchange of views at the October European Council. That will help President Tusk to have a focused and meaningful exchange of views with the leaders, in October, she stressed.

Furthermore, last week Finland's Presidency met with the new chair of the Budgets Committee and with the new rapporteurs on MFF and own resources. The Parliament's position has not changed, it is in favour of the overall amount of 1.3% of the EU27 GNI, she clarified, adding that lawmakers support the introduction of a basket of new own resources, as proposed by the Commission, and is open to additional own resources.

The Parliament also suggested that the new commitments of President-elect Ursula von der Leyen would have to be incorporated in the next MFF and be matched with additional funding. In parallel, work will continue on the various sectoral proposals to make further progress on Council mandates or conclude additional 'common understandings' with the EP.

The minister pointed out that their aim is for an agreement to be signed before the end of the year, and that the EP shared this ambition.

Guenther Oettinger, EU Commissioner in charge of Budget and Human Resources, who put on the table the executive's proposal for the new MFF last May, echoed the same deadline. He urged that the agreement should be ready before Christmas. “Fifteen months passed since our initial proposal was presented,” he said noting that “if the things go with such speed, the deal will be ready after three years, not three months”.

“My big concern is that Europe will be in a difficult economic and geopolitical situation if there is no budget by 1 January, if we have no programme in order to promote growth, in order to create jobs in 2021 and onwards. Even it is almost too late now.” He put the emphasis that the sectoral proposals will be needed by spring, especially for agriculture and cohesion.

Urging for sticking to the timetable, the Commissioner recalled what happened in the first half of 2014. It was a waste of time, but the economic situation was more favourable, he asserted, adding that now some big Member States are facing recession. “It's better to have good budget than quick budget, but we need both,” he argued, specifying that it will be 'bad budget' if agreed in November next year because infrastructure, research, defence initiatives cannot be implemented in 2021.

On the new own recourses, he commented that when the European project was founded, customs revenue was the main source of income. Today it is 12% of the EU resources. Mentioning trade agreements struck already or under preparation, such as with Japan, Mercosur, Vietnam, Mexico, Australia, New Zealand, Singapore, he said that the reduction of customs revenue is in the interest of trade, of the economy, but structurally they will continue to decline.

According to him, it is necessary for the EU to reinforce own resources that should be at least 10-12%. “We can be flexible in choosing such, but since July we've been bending backwards,” he reported. “There were reactions against every conceivable new own resource, but do we want the direct contributions to reach 80%,” Commissioner Oettinger pointed out.

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