EU leaders will avoid, on Thursday 20 June in Brussels, any tense discussions on elements of the EU's next multiannual financial framework (MFF) for 2021-2027 (see EUROPE 12277/12). “It is not a question of going back to the substance, but of taking note of all the work that has been done. We must hand over the baton to the Finnish Presidency”, summarised one European diplomat.
The European Council is expected to hold a more in-depth exchange of views in October 2019 and give a mandate to the future Finnish Presidency of the Council of the EU to continue work on the draft Negotiating Box. This evolving document, which is only undertaken by the Presidency of the EU Council, aims to facilitate an agreement at the appropriate time.
At the last General Affairs Council, several ministers considered that the latest version of the draft Negotiating Box was unbalanced. Some cohesion countries have welcomed some progress in this version.
Differences also on the timetable. Most Member States agree that an agreement on the next MFF should be reached by the end of 2019 at the latest. Sources indicate that the European Council may add an extraordinary meeting of Heads of State or Government, for example, in November 2019, or even, if necessary, in February 2020. Some countries mention early 2020 as a possible compromise. Several Member States would like to see things go faster by putting the figures on the table. "Negotiations will really start when the numbers are on the table", one source predicted.
One thing seems certain: the process of the United Kingdom's withdrawal from the EU will have to be clear in order to be able to close this file at European Council level. The draft Negotiating Box should also contain elements on the euro area budget (see other news).
Discussions with the European Parliament will also have to be launched in order to reach a final political agreement as soon as possible in 2020, to avoid delays in the start of European programmes, as from 1 January 2021.
The last debate at the European Council in December 2018 and the discussions in the General Affairs Council showed significant differences between Member States on the overall volume of the budget, the EU's own resources, or the envisaged reduction in agricultural and cohesion policy expenditures.
The club with the 1% cap. The club of 'net contributor' countries requesting an EU budget capped at 1% of the EU's gross national income (GNI) includes the Netherlands, Denmark and Sweden. These countries publicly reject the Commission's proposal as too generous (1.14%).
Germany has not yet publicly mentioned its support for this 1% limit. But a budget at 1% of GNI would already represent a 10 billion increase in Germany's national contribution to the EU budget (France reported an increase of 6 billion euros).
German Chancellor Angela Merkel reportedly pointed out at the December 2018 European Council that the Commission's proposal should be revised downwards and that the European Parliament's position (1.3% of GNI) is not acceptable.
‘No' to the reduction in agricultural spending. France has taken the lead among countries (Ireland, Spain, Poland...) that are refusing the cuts in funding provided by the Commission for the Common Agricultural Policy (CAP). These countries are calling for the current CAP budget of 27 Member States to be maintained from 2021 to 2027. France also wants to strengthen the environmental dimension of the CAP, as does Germany in particular. France and the Commission want future 'eco-schemes' to be mandatory, while several countries are asking for them to be optional.
Countries are divided on the capping of subsidies for large companies, with most wanting an optional, not mandatory, scheme. The external convergence of aid is also a source of controversy between countries, between those who want to go further (Poland and the Baltic States in particular) and those who want to slow down this process (Italy, the Netherlands, Belgium, etc.)
With regard to the cohesion policy, many of the countries benefiting from it (Poland, Slovakia, Hungary, etc.) are opposed to a reduction in appropriations as proposed by the Commission. Some cohesion countries welcomed the elements of flexibility added in the latest version of the draft Negotiation Box.
Own Resources. Discussions on this subject are laborious, but everyone is aware that a gesture will have to be made towards the European Parliament. France and Italy are the most ambitious countries in this respect, even if their ideas differ.
The 'plastic tax' is mentioned in the draft Negotiating Box, but several countries are against it.. Environmental taxes are not very popular in Eastern European countries.
France and Germany, in particular, defend the financial transaction tax. Germany and other countries are said to have reservations about the digital tax and also about the carbon tax.
The removal of rebates also divides countries. Some, such as the Netherlands, would like to see the corrective mechanisms maintained.
In the area of migration, it will be necessary to decide which internal and external policy instruments can contribute to the management of migration flows. The question is also whether the EU Facility for Refugees in Turkey should be extended to other third countries and whether this type of instrument should be kept outside the EU budget.
Countries are divided on the budgeting of the European Development Fund (EDF) and several call for the maintenance of a "separate" European Neighbourhood Instrument, exclusively dedicated to the EU's neighbourhood.
At the European Council in December 2018, Hungary emerged as the most hostile country towards the future instrument to protect the Union's budget in the event of a widespread default by a Member State. Several countries are asking to take into account the EU Council's Legal Service's reservations on this instrument. EU Heads of State or Government will have to decide on this tool at the end of the negotiations. France, Germany and the Scandinavian countries are the ones most in favour of this 'rule of law' mechanism.
To consult the latest version of the draft Negotiating Box: https://bit.ly/2Xirsyx (Original version in French by Lionel Changeur, with editorial staff)