Policy Update

Long-term budget talks stall at EU leaders summit

EU heads of state failed to make progress during the December 12-13 European Council summit on the next long-term EU budget negotiations. Rather than holding detailed discussions on the EU budget, leaders adopted prepared conclusions calling for the European Council President, Charles Michel, to take negotiations forward without specifying a timeline. Michel has, for now, discarded his idea to hold a special budget summit in February 2020 in favour of holding bilateral discussions with EU governments. Instead of delving into negotiations on the 2021-2027 multiannual financial framework (MFF), the European Council summit was dominated by discussions on a proposed 2050 climate neutrality target and the European Green Deal proposal. 
In October 2019, the Finnish Council Presidency proposed a compromise MFF size of 1.055% of the 27 EU member states’ gross national income (GNI). This proposal would strike a middle ground between the European Commission’s proposal, which would represent 1.11% of the 27 EU member states’ and the position of the more frugal countries, such as Austria, Belgium, Denmark, Germany, the Netherlands, and Sweden, which advocated for an overall budget size of 1% of GNI. Shrinking the budget largely meant cuts across the board, including for R&D and development spending. The European Parliament’s negotiating team denounced the Finnish proposal for failing to meet commitments to investment, youth, climate and security, suggesting that such a proposal would “condemn the European Union to failure.”
The lack of progress towards meeting any of the deadlines set out so far for wrapping up an MFF deal further increases the likelihood that an agreement will not be reached until the German Presidency of the Council of the EU in the second half of 2020.  
Council conclusions - European Council

Press release - European Parliament