Feuding EU does not plug Brexit hole in budget
23 February, 2020
European Union leaders fell out on Friday over their next long-term budget after fraught talks over a gaping Brexit hole in their joint coffers, with poorer countries demanding more aid and their “frugal” peers determined to rein in spending.
Brexit has left the EU short of some €75 billion and the 27 remaining EU countries failed to agree on the overall size of the bloc’s 2021-27 budget or how exactly to spend it.
“We need to acknowledge that the variations are too large still to find agreement,” German Chancellor Angela Merkel told reporters after two days of talks in the EU’s hub, Brussels.
Setting the budget has always been a tug of war, but was fiercer than ever before this time around because Britain’s exit from the bloc last month came amid costly new challenges, from climate change to managing migration and an evergrowing digital economy.
The standoff has exposed rifts between countries in the north and south, between east and west, and between more developed and less advanced economies.
Net payers dubbed the “Frugal Four” - Austria, Denmark, Sweden and holland - dug within their heels, demanding that the budget is capped at 1% of the bloc’s monetary output.
Beneficiaries of the generous handouts opposed deep cuts in development aid and farming subsidies in comparison to those they get under the current 2014-20 plan.
“Nobody really was pleased,” said Prime Minister Andrej Plenkovic of Croatia, among the countries seeking more aid.
The feud also underlined the actual fact that, following turmoil of Brexit that brought them together, the bloc still has many issues that divide it.
“These divisions are there. We don’t need Britain for that. They were playing out through the financial crisis a decade ago, through the migration crisis, we’re now seeing them on budget issues,” French President Emmanuel Macron said.
After practically 30 hours of complex negotiations, the leaders were no nearer to a deal than if they first convened on Thursday with a proposal to create the budget at 1.074% of the continent’s gross national income, or some €1.09 trillion ($1.2 trillion).
A new blueprint of just one 1.069% equally failed to impress and was dubbed by one EU official as “a Frankenstein proposal.”
The “frugal four” stood firmly against a scheme that could allocate one-third for development aid to help poorer regions grow and another third on support for farmers, an integral priority for Paris.
Germany, the EU’s powerhouse and biggest net contributor, was upset about taking the brunt of the Brexit shortfall and developing worse off than France.
Berlin, Vienna and others wanted to see more give attention to border management following Europe’s migrant crisis of 2015-16, tackling climate change, beefing up security and modernising the bloc’s economy through digital investment.
Source: the-japan-news.com