The President of the European Commission, Jean-Claude Juncker, presented “an opportunity to shape our future” i.e. the broad outline of the 2021-2027 EU budget or Multiannual Financial Framework (MFF). With it, the Commission is hoping to respond to the internal and external challenges faced by the European Union. With Brexit coming into effect in March 2019 and growing eurosceptism, the European Union is at a crossroads and now, more than ever, the EU wants to defend its values and sovereignty against geopolitical risks from the United States, Russia or Turkey. It wants to show European citizens how it responds to their concerns. The Commission’s detailed proposals on the next EU budget will no doubt be a long process of political bargaining between Member States, the Commission and ultimately the European Parliament.
With the departure of the UK, the Commission estimates that the EU is facing a budget gap of 12 to 14 billion euros per year. Therefore, it has proposed to close this gap through cost savings, new revenues and additional contributions from each Member State. Paris and Berlin, whose joint contribution will reach approximately 40% of the EU Budget broadly support the proposals, however, only under certain conditions. France, the second largest contributor and third largest beneficiary, wants to promote, under Macron’s presidency, a major renewal of the EU. Additionally, the coalition agreement between the Christian Democrats and Social Democrats in Germany allows Berlin to contribute more to the EU, throwing support behind the budget proposals. However, the Italian position is uncertain with Giuseppe Conte’s new eurosceptic government and other net contributors such as Netherlands, Sweden and Austria having already expressed their opposition to raising their contribution to the EU Budget.
The Commission proposed to increase EU expenditures by 50% for research and 40% for security, to double the Erasmus programme for students budget and to “almost triple” spending on border protection. Nevertheless, some traditional EU policies will shrink, notably the Common Agricultural Policy (CAP) and the Cohesion Policy, with expected cuts of around 5% for both. Commissioner Günther Oettinger, in charge of the EU budget ,also proposed to increase pressure on governments by making the payment of funds conditional on “respect for the rule of law.” A not so subtle swipe at Hungary and Poland. Furthermore, Berlin has called for a refined type of conditionality; the need for the country receiving EU funds to implement certain structural reforms. This idea however has not been well received in Paris, where it is considered that these measures fall outside of the budget’s goal.
For the time being, Oettinger is putting pressure on Member States to move quickly in order to reach an agreement before the European Parliamentary elections in May 2019 but this appears unrealistic. Divergences amongst Member States remain deep along the usual North/South, East/West, rich/poor, old/new divides, which will no doubt come to the forefront during the upcoming negotiations.