EU President Charles Michel convened the heads of state and government of the 27 EU countries for a scheduled extra summit on 20 February to break the political impasse on the financing of the EU.
Michel says that the time has come to reach an agreement at the highest level on the multiannual financial framework for the years 2021 - 2027. That is the reign of the new European Commission that took office last year.
For months, the EU countries have been negotiating with the Von der Leyen Commission and the European Parliament on the new multi-annual budget with significant results. Due to the departure of the British, the budget has a deficit of around 12 billion euros per year. The other EU countries will have to share the loss of the British contribution among themselves.
In addition, the European Union is facing major shifts in spending, including through the Green Deal, the plan to be climate neutral by 2050. In addition, the European Commission and the European Parliament have presented new wishes and new plans for the coming years that also require additional expenditure.
Ideally, the new multi-year budget should already have been settled at the end of last year, by the previous European Commission - Jüncker. Even then it became clear that there were major financial problems ahead, not only in terms of amounts, but also in timeliness. The European Commission needs about a year to draft laws to spend the money. As a result, the first year of the new EU government team could become a lost year for starting up new plans.
Four EU countries (the Netherlands, Austria, Sweden and Denmark) want the new 7-year budget to be maintained at the current level of a maximum of 1.00 percent (around 1000 billion euros) of European gross national income. The Von der Leyen Commission is betting at 1.11 percent and the European Parliament at 1.3 percent. But the opinions differ not only about the money, but also about the content of the current and future EU countries. Some EU countries believe that EU already has far too many tasks, and should shrink.
In the past two weeks, close associates of EU President Michel spoke with the political advisers of the 27 heads of government. This procedure was intended to determine where the lower limit for all parties lies. This discussion has been in a total political impasse for more than a year. According to Brussels sources, a compromise is only possible if we look not only at the size of the budget, but also at how it is spent (who benefits from it) and at a new discount scheme for countries (net payers) that otherwise disproportionate to the EU Pay.
With the convening of this extra financial summit, EU President Michel puts pressure on the leaders to make concessions. A failure is not only a defeat for him as EU president, but has a negative impact on all EU leaders. Moreover, failure only makes the chance of an agreement later this year more difficult. Above all, it will only spoil the atmosphere, the VDL Committee cannot start in an innovative way and other much needed revisions (Green Deal?) Will not even get off the ground.