EU European Affairs Ministers will debate by videoconference on Wednesday 15 July the proposals by the President of the European Council, Charles Michel, on the EU’s Multiannual Financial Framework (MFF) for 2021-2027 and the Recovery Plan to overcome the Covid-19 crisis.
The General Affairs Council will thus prepare the extraordinary European Council meeting on 17 and 18 July devoted to these sensitive subjects.
Member States’ Ambassadors to the EU (Coreper) discussed on Tuesday 14 July the ‘negotiating box’ presented by Mr Michel on Friday 10 July (see EUROPE 12525/1).
Regarding the European Recovery Plan, the issues to be decided by EU leaders will be: - the overall volume (the so-called ‘frugal’ countries and Finland are opposed to a total volume as high as 750 billion euros); - the balance between loans and grants to Member States (frugal countries favour loans); - and governance and the disbursement of funds (voting in the EU Council by qualified majority of Member States, reverse qualified majority or unanimity).
On the distribution key for the funds under the Recovery and Resilience Facility, Mr Michel proposed that 70% of this fund should be committed in 2021 and 2022, according to the distribution criteria proposed by the Commission. 30% would be committed in 2023, taking into account the decline in GDP in 2020 and 2021. The total envelope is expected to be disbursed by 2026.
In summary, the frugal countries believe that the proposal is heading in the right direction. But the beneficiary countries (Italy, Spain...) have difficulties with these new allocation criteria.
On governance, Mr Michel’s proposal is that Member States would draw up national plans for recovery and resilience for the period 2021-2023 as part of the ‘European Semester’ budgetary process, drawing on the Commission’s country-specific recommendations. These plans would be reviewed in 2022, taking into account the final distribution key. The evaluation of these plans would be approved by the EU Council acting by qualified majority on a proposal from the Commission.
The Netherlands continues to call for a procedure requiring unanimity.
Regarding the MFF outside the Recovery Plan, the debates will focus in particular on corrections. Mr Michel proposes to maintain flat-rate discounts for Denmark, Germany, the Netherlands, Austria and Sweden. Several countries (France, Italy...) consider that the amounts granted are too large.
Another delicate issue: the granting of European financial aid would be linked to respect for governance and the Rule of law. Mr Michel proposed to maintain his proposal made in February that, in case of shortcomings and risks to the proper implementation of the EU budget, the Commission would propose corrective measures, to be approved by the EU Council by qualified majority.
But Hungary and Poland do not want this conditionality.
With regard to the creation of new own resources to finance the reimbursement of the Recovery Plan, a tax linked to non-recycled plastic packaging waste would be introduced in 2021, according to Mr Michel’s plan.
That question would no longer pose a problem, as Poland was the only country to request clarification of certain modalities. (Original version in French by Lionel Changeur)