An increasingly less ambitious EU budget

The good intentions of Ursula von der Leyen’s Commission to provide the European Union with a modern budget, capable of funding new priorities such as competitiveness and defence, are coming up against narrow national accounting considerations, just as negotiations on the new Multiannual Financial Framework enter their final phase. On Saturday, the Irish Council Presidency presented the new ‘negotiation box’, the document serving as the basis for negotiations between member states. Leaders will discuss it at the European Council on Thursday and Friday. The aim is to reach an agreement by the end of the year. But as negotiations progress, ambitions are waning. The Irish “nego-box” envisages cuts of €141 billion compared with the Commission’s original proposal of €1,763 billion over seven years. The cuts are concentrated in the budget chapter dedicated to competitiveness and defence (down 13 per cent) and in that for the EU’s foreign policy (down 17 per cent). By contrast, the resources allocated to the Common Agricultural Policy and Cohesion Policy – and the related national allocations of funds – remain untouched. Ireland has sought to sell its compromise as ‘realistic’. It is the only way to satisfy two irreconcilable camps: the ‘frugal states’, who are demanding ‘several hundred billion euros’ in cuts, and the ‘Friends of Cohesion’, who are insisting on safeguarding the funds they receive for farmers and regions. The result is a failure for everyone. By insisting on cuts, the ‘frugal states’ are undermining what they claim to be their main objective: the modernisation of the budget to focus on new strategic priorities. By prioritising farmers and regions over investment in the future, the ‘Friends of Cohesion’ (led by Italy) are losing all legitimacy to demand more resources or more shared debt to fund defence, competitiveness and other tools for tackling crises.