Institutional negotiations to finalise the details of the Economic Recovery Plan and the EU’s Multiannual Financial Framework (MFF) for 2021-2027 will continue on Wednesday 14 October, despite the limited progress made on Thursday 8 October (see EUROPE 12577/1).
The two issues that continue to cause tension between the European Parliament and the Council of the European Union are the increase in appropriations for 15 flagship programmes and, above all, the question of the link between the disbursement of European funds and respect for the rule of law.
The German Presidency of the EU Council will review the state of negotiations with the European Parliament at the General Affairs Council on Tuesday, 13 October.
Trilogue Monday 12 October on the rule of law. On the link between budget and the rule of law, a first trilogue (EU Council, European Parliament, Commission) is scheduled for Monday 12 October. This is the first time that the European Parliament and the EU Council will try to bring their positions closer together, following the position established by qualified majority in the EU Council on the protection of the budget against shortcomings in the rule of law (see EUROPE 12571/4, 12575/17).
Politically, the issue of ‘rule of law’ conditionality is part of the package already composed by the MFF and the Recovery Plan.
The EU Council’s position is “a starting point” and “we need to move towards common ground to find an agreement”, explained a senior EU diplomat on Friday 9 October.
Parliament is calling for a decision to suspend payments in the event of a country’s failure to comply with the rule of law to be taken by a qualified ‘reverse’ majority of Member States. To clarify: only a qualified majority of countries could oppose a proposal of this kind from the Commission. On the other hand, the EU Council provides for the adoption of sanctions by qualified majority, with a possible escalation of discussions in the European Council.
EU flagship programmes. “I think we are quite close to an agreement” on the European Parliament’s requests for more money for these programmes, the official said.
The German Presidency’s offer would amount to a figure of between 5 and 9 billion euros over the entire period 2021-2027, a European source explained.
Parliament wants a higher figure and negotiations on this could begin in earnest on 14 October. The German Presidency did not even have time to present its proposal at the negotiating session on Thursday 8 October.
Own resources. In his letter to the European Parliament dated 7 October presenting the German Presidency’s offer, the German Ambassador to the EU, Michael Clauß, agreed to draw up a timetable, in a future interinstitutional agreement, for the introduction of new own resources over the period 2021-2027.
“This is a huge concession”, he comments in the letter.
The compromise envisaged adds that the revenue from the new own resources introduced after 2021 will contribute to the repayment of the funds used for expenditure under the Recovery Plan and the corresponding interest rate. But “neither the EU Council nor the national parliaments can be legally bound by an interinstitutional agreement to decide on a fixed date for a proposal that is not even on the table yet”, Mr Clauß specified.
Time is running out. According to a European diplomat, the German Council Presidency has presented “a comprehensive and constructive offer to speed up the negotiations”. “Every day we lose in negotiations is a day that postpones the start of the Recovery Plan”, he warned.
Negotiators in the EU Council explain that an agreement should be reached by mid-October at the latest, to allow ratification of the own resources decision (which will authorise the Commission to borrow on behalf of the EU27 to finance the European Recovery Plan) by national parliaments by the end of 2020.
Otherwise, there is a risk that the Recovery Plan will not be operational as of 1 January 2021, as originally planned.
See the letter from the German Presidency: https://bit.ly/2I4QlrA (Original version in French by Lionel Changeur)