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EU leaders at odds over filling €75bn Brexit shortfall EU summit collapses as leaders struggle to fill €75bn Brexit hole
(about 1 hour later)
Agreement on a final budget deal at summit is unlikely, says Danish PM States deeply divided over budget as big contributors reject plan for them to pay more
EU leaders were left holed up in the staff canteen in Brussels as they argued over plans to fill a €75bn Brexit hole in their budget after Angela Merkel led other major contributors in rejecting a proposal that they hand over billions more euros. A summit of EU leaders seeking to fill a €75bn hole in the bloc’s budget left by Brexit dramatically collapsed after Angela Merkel led major contributors in rejecting a proposal that would have left them paying billions more.
A number of the prime ministers and presidents, including the French leader, Emmanuel Macron, a glass of red wine in hand, settled down for a buffet dinner at the EU’s Europa building as the budget summit dragged on. The meeting in Brussels was brought to an abrupt end on Friday evening, with the leaders deeply divided, leaving the European council president, Charles Michel, to admit: “We need more time.”
The UK’s departure has left EU capitals struggling to find the cash for their plans over the next seven years to tackle the climate emergency, aid poorer regions and continue to subsidise farmers through the common agricultural policy. The UK’s departure has left EU states struggling to fund plans over the next seven years to tackle the climate emergency, aid poorer regions and continue to subsidise farmers through the common agricultural policy.
Four member states, known as the “Frugals” – the Netherlands, Denmark, Austria and Sweden – have insisted that the EU budget amounts to no more than 1% of the bloc’s gross national income. The 27 heads of state and government must agree on a budget for the next seven years, and the European parliament must give its endorsement, before the end of 2020, to avoid the EU’s spending programmes grinding to a halt. “We are super, super late,” admitted one EU official.
They received the support of Merkel, the German chancellor, in opposing proposals that would slash rebates they receive on their contributions. Michel, a former prime minister of Belgium, came under fire during the summit, which started on Thursday afternoon, for aiming “far too high” with a proposed budget of 1.074% of the bloc’s gross national income (€1.094tn).
The budget negotiations, which started on Thursday evening, looked set to continue into Saturday after the initial spending plan put forward by the European council president, Charles Michel, failed to impress. Four member states, known as the “frugals” – the Netherlands, Denmark, Austria and Sweden – have insisted that the EU budget amounts to no more than 1% of the bloc’s gross national income.
Michel, a former prime minister of Belgium, had come under fire for aiming “far too high” with a proposed budget of 1.074% of the bloc’s gross national income (€1.094tn). They received the support of Merkel, the German chancellor, in opposing proposals that would slash the rebates they receive on their contributions, designed to ensure the biggest contributors do not overpay.
One EU diplomat said of Michel: “He wanted enough cash to buy a Range Rover; we only have the money for a Volkswagen – and worst of all he asked Mutti [Merkel] to pay for the Range Rover.”One EU diplomat said of Michel: “He wanted enough cash to buy a Range Rover; we only have the money for a Volkswagen – and worst of all he asked Mutti [Merkel] to pay for the Range Rover.”
The latest suggestion tabled by the European commission on Friday evening would reduce the size of the additional burden on the the biggest payers, including Germany, through significant cuts in the EU’s science and research programmes. The compromise proposal would trim €10bn off a budget put forward by Michel. Responding to claims from reporters that the summit had been a failure, Michel insisted that the issue had to be debated at the “highest political level” and that he now better understood the member states’ positions.
Under the new plan, the four Frugal member states and Germany would retain their rebates. “As my grandmother used to say, in order to succeed we have to at least try,” Michel said.
France would see increased cash for their farmers through the common agricultural policy. The hand-outs would be made up through reductions to the Horizon research programme and the space programme. A late suggestion on Friday tabled by the European commission proposed to reduce the size of the additional burden on the the biggest payers, including Germany, through significant cuts in the EU’s science and research programmes.
The commission proposal is for 1.069% of GNI. The Austrian chancellor, Sebastian Kurz, said the momentum was in the right direction but there are doubts whether the cuts are significant enough to win over support. The compromise proposal would trim €10bn off a budget put forward by Michel.
The stance of the richest member states has enraged countries who are net recipients of EU funds known as the Friends of Cohesion, in reference to the main stream of cash dedicated to the EU’s poorest regions. Under the new plan, the four “frugal” member states and Germany would retain their rebates. France would also see increased cash for its farmers through the common agricultural policy.
Andrej Babiš, the prime minister of the Czech Republic, said that unless the Frugals changed their minds, “we can go straight home”. He said: “They propose that all states pay €75bn less into the budget than is proposed.” The proposal failed to secure the unanimous support of the leaders, however. “That is democracy,” the European commission president, Ursula von der Leyen, said at a press conference at the end of the summit. “It is a good tradition in democracy to debate on the different views, the different emphases … We are not there yet but we are in a good way.”
The Estonian prime minister, Jüri Ratas, said that “all countries need to step back one or two steps” in order to find a compromise. “We have a long road ahead of us,” the former German defence minister added.
Merkel told reporters: “The differences were simply too big.”
Diplomats from the self-styled friends of cohesion" grouping, consisting of the net recipients of EU cash, put the failure down to a lack of solidarity among the richest member states.
The rightwing nationalist prime minister of Hungary, Viktor Orbán, who has built much of his success on attacking Brussels, told reporters: “Our ambition isn’t only to be very strong friends of the cohesion policy, but to also be very strong friends that work together for a strong EU, and for a strong EU budget for the next period.”
Earlier in the evening, a number of the prime ministers and presidents, including the French leader, Emmanuel Macron, a glass of red wine in hand, settled down for a buffet dinner at the EU’s Europa building as the budget summit dragged on.
During the last round of budget negotiations, it had taken the European council two summits to reach an agreement on the EU’s long-term spending, known as the multi-financial framework. A second summit is expected in March.