In Sofia on Friday 9 March, the ministerial conference on the multiannual financial framework (MFF) brought to light North-South and East-West divides between the member states, who were called upon to resolve the following equation: how, with the budgetary gap linked to Brexit, can the new political priorities – security, migration and innovation – be paid for without having to trim too much off the amounts reserved for the traditional policies, such as the common agriculture policy (CAP) and cohesion, which still represent nearly 75% of the Community budget?
To achieve this, “we need to be smart, to shed emotions”, said the Bulgarian Minister for European affairs, Ekaterina Zaharieva, calling on the member states to focus firstly on defining the political priorities before looking at the size of the next MFF.
Schematically, there are two opposing two schools of thought. Countries such as the Netherlands, Austria, Germany and Sweden are in favour of freezing or even cutting the CAP and the European structural funds in order to pay for the new priorities, the outlines of which are, the end of the day, uncontroversial.
The need for an in-depth reform of the CAP was mentioned several times. According to a Mr Wolff of the think tank Bruegel, 20% of ‘happy farmers’ are effectively getting 80% of it. France, the largest beneficiary of the CAP, is prepared to modernise the policy, but not to sacrifice it, its European minister, Nathalie Loiseau, told EUROPE, stressing its importance for the EU’s food sovereignty and farmers’ incomes.
Wolff said that freezing the CAP and cohesion at their current levels would save €100 billion. Denmark considers that by freezing the two largest expenditure posts, a global budget of 1% of gross national income (GNI) would then be enough to pay for the new political priorities.
In the opposite corner, the countries of central and eastern Europe and the Mediterranean countries want these funds to be preserved at the maximum level. To do this, some of them, such as the Baltic states and Hungary, are calling for an increase in the size of the budget and are prepared to increase their own national contributions.
Practically all member states consider that it is possible to improve the way in which the money is spent and the flexibility in the use of credit within the EU budget.
The idea that it is possible to combine support for the new priorities (e.g. the migration challenge) by using the existing financial instruments, such as the structural funds, was mooted several times, by Spain and France, amongst others.
For its part, the European Parliament has decided not to choose between the new priorities and the traditional ones. It will propose a budget of 1.3% of GNP, announced Jan Olbrycht (EPP, Poland) (see EUROPE 11967). He said that this figure was simply arrived at by keeping the agriculture and cohesion policies at their current levels and increasing funds for education and SMEs.
Conditionality. The idea of making the award of European funds conditional on compliance with the rule of law, or a fiscal and social convergence trajectory, is clearly on the table. It is impossible to explain to our taxpayers that the beneficiary countries are not complying with the fundamental values, said Sweden. “We are firmly in favour of the idea that paying out European funds requires the beneficiary countries to respect the rule of law, this applies to all member states. It seems odd to us that European funds are paying for policies that are serving to move away from the rest of the EU”, said Loiseau.
The Netherlands takes a similar view, but Hungary and the Czech Republic are resolutely opposed to this idea. “We do not have the same concept of solidarity”, said the Hungarian representative, accusing the countries in favour of the concept of ‘conditionality’ of wanting to sell this idea to their voters.
Timetable. The Commissioner for the Budget, Günther Oettinger, acknowledged that the timetable issue was his “major concern”. He warned against putting back a unanimous agreement of the Twenty-Seven on the post-2020 MFF until after the European elections of May 2019. There is even a risk, he said, that an agreement will not be reached before 2020. This situation would lead to a delay in the implementation of Community programmes.
Olbrycht spoke along similar lines: “Parliament hopes to avoid the MFF being weaponised for the European elections”. (Original version in French by Mathieu Bion)