After a first exchange at the informal summit in Nicosia, the heads of state or government of the European Union countries will again discuss the 2028-2034 Multiannual Financial Framework (MFF) on Friday 19 June in Brussels, this time on the basis of a quantified proposal from the Cyprus Presidency of the Council of the EU (see EUROPE 13886/1).
The President of the European Council, António Costa, who is expected to tour the capitals in September in connection with the MFF, has announced budget discussions at every European summit and is not ruling out an extraordinary meeting at the end of November in order to reach a unanimous agreement by the end of 2026.
“With the new architecture, we’d need the whole year [2027, ed.] to prepare”, a European source had indicated on Tuesday 16 June, referring to the future National and Regional Partnership Plans (NRPPs), on which the EU Council adopted its position at the beginning of the week (see EUROPE 13889/3). According to that source, there is “increasing willingness” among the Member States to reach an agreement by the end of 2026.
According to a draft set of conclusions dated 16 June, the European Council will indeed call for a final agreement “by the end of the year” on the 2028-2034 MFF, with the next Irish Presidency of the Council being tasked with preparing a new ‘negotiating box’ by the October summit.
Judging by the debate held in the ‘General Affairs’ Council (see EUROPE 13889/1), European leaders are likely to stick to their initial position. The ‘frugal’ or ‘modernising’ countries, such as Germany, the Netherlands and Sweden, will criticise the Cyprus Presidency for the absence of radical cuts to the Commission’s initial proposal and for preserving traditional policies.
The Cypriot negotiating framework might equally be called “a ‘nostalgia box’ because it prioritises agriculture and cohesion while cutting competitiveness”, a national diplomat said ironically on Wednesday.
These ‘modernising’ countries also intend to slash the operating expenditure of the European administration. But they refuse to let anyone touch their budget rebates, which reduce their national contribution to the EU budget.
Own resources. According to Mr Costa, there is no doubt that making progress on new own resources will be “decisive” in matching the EU’s political ambitions with the necessary financial means to make them a reality.
The European Commission has suggested the creation of several own resources, such as a levy on uncollected electronic waste, on the turnover of large companies (CORE), and a charge on revenue from the ETS Emissions Trading Scheme (see EUROPE 13728/20, 13680/2). The European Parliament is proposing three additional ones: taxes on digital services, cryptocurrencies and online gambling (see EUROPE 13858/1).
According to a third diplomatic source, “there is a consensus that, if the envisaged level of expenditure is maintained, new own resources will be necessary”.
Yet Sweden sees own resources as a distraction from the real debate on the national contribution. The countries open to discussing such resources include the Czech Republic, Poland, the Netherlands and Belgium. But Prague and Warsaw reject any charge on the ETS scheme, while The Hague and Brussels do not want a tax on companies’ turnover.
According to the Irish Minister for European Affairs, Thomas Byrne, the CORE tax “does not appeal much to many Member States”.
The financial equation still remains unsolved: to deliver the growing political priorities entrusted to the EU, the variables are national contributions, own resources, and possibly even joint borrowing.
Given the strong budgetary constraints and the lack of appetite for increasing national contributions, there is “no other solution than own resources”, a fourth diplomatic source considered, predicting “difficult” discussions. That source noted that European economies have grown accustomed to “EU financial flows multiplied by two” under the current MFF. This was a way of indicating that the post-2027 MFF will have to be large enough not to dry up the investment flows needed to forge European sovereignty.
See the draft European Council conclusions: https://aeur.eu/f/mdt
It should be noted that on Wednesday, the European Committee of the Regions and associations of local and regional authorities, brought together within the ‘#CohesionAlliance’, argued for the introduction of new own resources and for “a standalone and predictable Cohesion Policy budget, covering all EU categories of regions within the National and Regional Partnership Plans (NRPPs) with safeguarded allocations at the regional level and for specific programmes such as Interreg”. They called for respect for the “subsidiarity principle with multilevel governance and partnership provisions”. (Original version in French by Mathieu Bion with editorial staff)