EU European affairs ministers were divided and rather critical, on Monday 17 February in Brussels, on the draft EU Multiannual Financial Framework (MFF) for 2021-2027 presented 3 days earlier by European Council President Charles Michel (see EUROPE 12426/1).
The State Secretary at the Croatian Ministry of Foreign and European Affairs, Andreja Metelko-Zgombić, said that this meeting of the General Affairs Council marked the beginning of an "intense and important" week. "The right compromise will be the compromise of quality completed on time and on schedule", she summed up.
EU leaders will have to negotiate hard at the European Council, starting Thursday 20 February, especially on the total volume of the MFF and the rebates (discounts) granted to some 'net contributor' countries.
The one percent club makes their voice heard. At the General Affairs Council, several countries known as 'net contributors' to the EU budget (the Netherlands, Denmark, Sweden, Austria and Finland) claimed that the total level proposed by President Michel, i.e. 1.074% of the EU's gross national income (GNI), was too high.
In an op-ed published on Monday by the Financial Times, Austria, the Netherlands, Sweden and Denmark called for the EU budget after 2020 to remain at 1% of GNI.
Germany is rather in the 1% camp, but is willing to compromise. German Federal Finance Minister Olaf Scholz said that Mr Michel's proposal did not take sufficiently into account the need to modernise EU policies. The sustainable economy, border protection, digitalisation, conditionality on respect for the Rule of law are not sufficiently taken into account in this proposal, according to him.
Rebate discrepancies. The Netherlands, Denmark, Sweden, Austria and Finland call for "a system of permanent corrections to avoid excessive budget costs on individual states". But France and Italy, in particular, are opposed to it. Several countries criticised Mr Michel's negotiating box for maintaining the 'flat-rate reductions' granted for several years to Denmark, Germany, the Netherlands, Austria and Sweden.
"France is a little tired of paying money that will then be redistributed as a rebate to other European countries", said French Secretary of State for European Affairs Amélie de Montchalin.
"We are asking for clarification on the rebates that persist", said Vincenzo Amendola, the Italian minister. He pointed out that the so-called 'frugal' countries want a 1% budget, whereas it is they who benefit from rebates which, "for us, no longer makes sense".
Traditional politics in the crosshairs. Swedish Minister Hans Dahlgren described Charles Michel's proposal as "disappointing". "The total budget is too big. It still spends a lot of money on agriculture and regional aid to the detriment of more modern areas such as research and competitiveness", he said.
Some of the 'cohesion-friendly' countries noted improvements in the distribution of cohesion policy funds, but again criticised the planned cuts in funding. Slovenian Foreign Minister Miro Cerar noted "slight improvements" in cohesion policy (compared to the Finnish compromise), "but this is still insufficient", he said.
France and other countries, such as Spain, have criticised the 14% drop in Common Agricultural Policy (CAP) spending. Amélie de Montchalin felt that farmers should be given "at least the same means" as the amounts they have today. We must also "strengthen our European defence and space policy".
Spain's Minister of Foreign Affairs, Arancha González Laya, said the proposal on the table was "insufficient" in its ambition and "unfair" in the distribution of funds. The proposal does not recognise the role of agriculture as a fundamental element in the ecological transition, she said. "For the time being, the project does not constitute a sufficient basis for reaching an agreement", the Spanish minister said.
Italy criticised the €7.5 billion cut in rural development spending and the elements on the 'external convergence' of agricultural aid (Italy believes it has already paid for this in the current MFF).
Luxembourg Minister Jean Asselborn says that Brexit should not be mostly compensated for by cuts in traditional spending. He also criticised the drastic cuts in the EU's administrative budget.
Do not weaken the Rule of law mechanism. Tytti Tuppurainen, the Finnish minister, considered the total amount proposed by Mr Michel to be "too high". Like the Scandinavian countries, the Netherlands and Germany in particular, she encouraged Charles Michel to be very "strong on the wording" of the rules on respect for the Rule of law. She advocated for a "strong" Rule of law mechanism in the next MFF. In Charles Michel's draft, reference is made to a procedure whereby the Commission will propose measures to be approved by the EU Council acting by qualified majority (and not by 'reverse' qualified majority, a procedure preferred by supporters of a binding mechanism).
A good starting point, according to the Commission. Budget Commissioner Johannes Hahn said, after the EU Council, that Mr Michel's draft was "a good starting point", as it provides for: - more money than in the Finnish compromise; - new money for the Just Transition Fund; - 25% of spending on climate-related actions; - two new own resources (plastics tax and revenue generated by the Emissions Trading Scheme). The Commission hopes that an early agreement will be reached on the next MFF, as time is running out.
"If no one is satisfied, it means that it is a good compromise", Mr Hahn summed up, saying that this time it was possible to reach a conclusion in a single meeting of the European Council. But he plans to take "several shirts" with him to stay fresh for several days. (Original version in French by Lionel Changeur, with Mathieu Bion and Camille-Cerise Gessant)