Speaking in Brussels on Wednesday 5 February, Stefan Löfven, the Prime Minister of Sweden,explains why budget rebates, or adjustments, need to be retained during the whole of the next EU Multiannual Financial Framework (MFF) from 2021-2027 (see EUROPE 12416/2).
This week, Charles Michel, the President of the European Council, is holding a series of talks with a number of heads of state or government to sound out EU leaders’ red lines ahead of the extraordinary European Council on 20 February to discuss the next MFF and present a draft compromise on this highly sensitive area.
Quality, not speed. Asked about the chances of reaching an agreement at the European Council on 20 February, Löfven said: “The countries are too far apart at the moment; there is no reason for us to delay the process, but the most important thing is the outcome. I'd rather take it a little more slowly and make sure the result is good than move fast and get a bad result”.
After his meeting with Charles Michel on 3 February, Hungarian Prime Minister Viktor Orbán said it would be good to reach a decision at the European Council on 20 February, but that “the quality of the budget is more important than the date of its adoption”.
The rebate battle. Rebates will be needed in the future, said the Swedish Prime Minister, because, in 2020, five 'net contributor' countries will contribute 50% of the net EU budget. “If that continues until 2027, these countries will be contributing 75% and we can't have a situation like that, it's not possible”, he said. “Rebates or adjustment mechanisms must therefore be maintained in the future”.
However, a group of 18 Member States (Bulgaria, Cyprus, Czech Republic, Estonia, France, Greece, Hungary, Italy, Luxembourg, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovenia, Slovakia and Spain) are pushing to end the rebates now that the United Kingdom is leaving the EU.
That is what Viktor Orbán said during his meeting with Michel, stating that the current system of rebates is “unfair”.
On Tuesday 4 February, Jüri Ratas, the Prime Minister of Estonia, acknowledged that negotiations might extend beyond the European Council of 20-21 February. Estonia and Lithuania are both asking for direct payments for Baltic farmers to catch up with the EU average (€266 per hectare in the EU, compared to €181 per hectare for farmers in Lithuania).
EU leaders are mainly divided on the total amount of the EU budget, with the group of so-called 'frugal' countries (Netherlands, Sweden, Denmark, Austria, etc.) demanding that the limit of 1% of the EU's gross national income (GNI) should not be exceeded over the period 2021-2027.
Fifteen member states, identified as 'friends of cohesion', have indicated that they would not accept major cuts in cohesion policy funding. António Costa, the Prime Minister of Portugal, met with Michel on 5 February to discuss the MFF, and gave David Sassoli, the President of the European Parliament, the 'Beja declaration' from the 'friends of cohesion' countries (see EUROPE 12417/2).
Michel also held bilateral talks on 5 February with Spanish Prime Minister Pedro Sánchez, Austrian Chancellor Sebastian Kurz and Dutch Prime Minister Mark Rutte.
On Wednesday, Pedro Sánchez, the Spanish Prime Minister, defended high budgets for structural funds and "direct payments to our small and medium-sized farmers". "We need ambitious budgets" to achieve the Union's objectives, he added. (Original version in French by Lionel Changeur)