On October 10, 2019, the newly elected European parliament affirmed the previous legislature’s positions on the 2021- 2027 multiannual financial framework (MFF), the EU’s next long-term budget, in an effort to avoid delaying the negotiation process at the European Council. The resolution supports an MFF of €1.32 billion (US$1.5 billion), representing 1.3% of the EU’s 27 member states’ gross national income (GNI) (excluding the UK), an increase from the current MFF’s proportion of the EU’s 28 member states (with the UK) of 1.03% GNI (1.11% including the off-budget European Development Fund), or €1.1 billion (US$1.3 billion).
However, heads of state failed to agree at the European Council summit on October 17-18, 2019, stalling the full passage of the budget. The summit was heavily dominated by discussions on Brexit and leaders abandoned their objective of reaching an MFF agreement by the end of the year. Instead, the summit concluded that the presidency should submit a revised ‘negotiating box’ (the negotiating document for the draft MFF legislation) by the end of 2019.
Member states remain divided on the size of the overall budget, how to prioritize spending areas, and whether to create new ‘own resources’, or sources of income for the EU. The more frugal countries, such as Austria, Belgium, Denmark, Germany, the Netherlands, and Sweden, have been pushing for a smaller budget than that put forward by the European Commission’s proposal, and are advocating for permanent ‘rebates’, and the establishment of a link between EU funding and respect for the rule of law. Many countries in southern and Eastern Europe, such as Croatia, Italy, Lithuania, Malta, Slovakia, Slovenia, and Spain, favor a higher overall budget, at least at the level of the Commission’s proposal. Greece supports the Parliament’s position of a budget at 1.3% of GNI.
The Finnish presidency of the Council of the EU has proposed a compromise budget size of 1.055% of the 27 EU member states’ GNI. This proposal would strike a middle ground between the European Commission’s (EC) proposal of 1.11% of the EU27’s GNI, and the position of the more frugal countries which are advocating for an overall budget of 1% of GNI. The deep divisions could mean a potential delay in reaching an agreement beyond the beginning of 2021.
News article - Warsaw Business Journal
Resolution - European Parliament
Summit conclusions - European Council