The Cyprus Presidency of the Council of the EU is expected to present its ‘negotiation box’ on the 2028-2034 Multiannual Financial Framework (MFF) at the end of this week, possibly on Friday 12 June. This ‘nego box’ (a detailed budget breakdown proposing amounts by programme) is then expected to be discussed by the Member States’ ambassadors to the EU (Coreper) at a special meeting on Sunday 14 June. This issue will be brought to the table at the meeting of ministers responsible for European Affairs on Tuesday 16 June in Luxembourg, then, at the end of next week, at that of heads of state and government at the European Council of 18 and 19 June in Brussels. Ahead of this series of meetings, the EU27 remain deeply divided.
On the one hand, a good 15 countries, including Italy, Spain and Poland, are pushing to preserve the historic policies of the European budget, starting with cohesion policy, as well as the CAP (see EUROPE, 13874/1). On the other hand, a group of northern European states, such as Germany and the Netherlands, are arguing for across-the-board cuts. In the eyes of the latter, “net contributors” to the Union budget, these cuts should also affect regional and agricultural funds, without sacrificing the “new priorities”, including defence, competitiveness, innovation and migration. The Cyprus Presidency is therefore under strong pressure as it strives to find a balance.
“Positions around the table remain sharply divergent. We are stepping up efforts. We know this is not yet the final landing zone, but this ‘nego box’ is an essential milestone so that capitals can begin to shift their initial positions”, a European diplomat said on Monday. And the same source stressed that meeting the objective of an agreement on the MFF by the end of 2026 is a “responsibility shared by all Member States”.
Pending the Cypriot document, one thing appears certain: this negotiation box will include cuts compared with the post-2027 MFF initially presented by the European Commission. Proposed last July (see EUROPE 13682/1), that draft amounted to nearly € 2,000 billion over seven years, or 1.26% of EU gross national income (GNI), including repayment of the debt inherited from the Covid-19 crisis. These cuts are expected to affect every part of the budget.
However, on the one hand, their scale should be more limited than what the northern so-called “frugal” countries are demanding – some of which have envisaged a 10-20% reduction in the overall size. On the other hand, the cuts could weigh less heavily on Heading 1 – which notably includes the National and Regional Partnership Plans (NRPPs), bringing together, among other things, cohesion and the CAP – than on the rest of the MFF.
“Budget cuts cannot fall disproportionately on Heading 2 [the Competitiveness Fund] and 3 [the Global Europe fund, financing the EU’s external action] alone. Although we all share Mr Draghi’s assessment that Europe faces a major competitiveness challenge, the next MFF must help close this gap, not widen it”, warned a diplomat from a country that is a net contributor to the budget.
In return, Germany, Sweden, Austria, Denmark and the Netherlands are likely to retain, at least in part, the “rebates” they have so far enjoyed on their national contributions.
All things considered, the equation of financing the MFF still appears just as difficult to resolve, while discussion on creating new own resources to feed the next budget seems to have stalled (see EUROPE 13882/19). Lastly, although still under discussion, the idea of postponing part of the repayment of the EU27’s common borrowing, the cost of which is estimated at € 168 billion over the whole of the next budget cycle, is still being rejected by several countries, including Germany. (Original version in French by Clément Solal)