Budget showdown slips to November as Costa pushes for quick deal

Por Gregorio Sorgi — POLITICOPolitics » POLITICO

BRUSSELS — EU leaders will go back to the drawing board in November as they race to finalize a deal on the bloc’s next seven-year budget by the end of the year.

During the first day of a two-day summit in Brussels on Thursday, European Council President António Costa announced he was convening an additional gathering on Nov. 26 in a bid to overcome disagreements and lay the ground for a final deal in December. To bring the sides closer to an agreement, he will present new budget figures before the meeting, according to an EU official, who was granted anonymity to discuss the confidential planning.

Costa is pressing leaders to finalize negotiations by the end of the year — before elections in France, Italy and Poland in 2027 threaten to derail the talks.

In a speech to the leaders, Costa warned that going past the end-of-year deadline will delay EU payments to farmers and researchers past Jan. 1, 2028, when the new budget is scheduled to come into force.

If leaders fail to reach a deal in December, the electoral calendar might push an agreement to May or even October 2027, Costa warned leaders in his concluding remarks, according to two EU diplomats briefed on the discussions.

Pressure on governments

Costa’s plan received a major boost on Thursday from French President Emmanuel Macron, who told fellow leaders that he won’t have a political mandate to sign a deal close to the French presidential elections in April 2027.

This is a major reversal for France, which has previously been unwilling to commit to the end-of-year deadline.

Macron’s words put more pressure on governments to advance the talks over the coming weeks — although some cast doubt on his good intentions.

“There are so many elections next year. [French far-right leader Marine] Le Pen herself [said] it’s undemocratic if we were now to agree,” said one EU diplomat.

Just hours before the leaders’ gathering, Le Pen renewed calls to halve France’s contributions to the EU budget if she wins the presidential elections next year.

She said that rushing the budget agreement before the French elections would be “a democratic scandal.”

The new frugal

Costa is stuck between messy domestic politics across Europe and hardening stances among the EU’s 27 leaders.

The so-called frugal EU countries pushing for major budget cuts — Germany, Netherlands, Austria, Sweden, Denmark and Finland — have publicly said that an Irish proposal envisioning €159 billion cuts doesn’t go far enough.

On Thursday, the six hardliners were joined by Belgian Prime Minister Bart De Wever, who joked in a press conference after the summit that “I’m married to a Dutch person so I’m very frugal also in my personal life.”

However, behind closed doors the budget hardliners employed a more conciliatory tone.

German Chancellor Friedrich Merz — the unofficial leader of the frugal camp — said that the Irish proposal has achieved progress despite reductions still being needed, said two EU diplomats briefed on the discussions.

He pointed to EU payouts to poorer regions, as opposed to farmer’s subsidies, as an avenue for cuts.

On the other side of the spectrum, Spanish Socialist Prime Minister Pedro Sánchez — who will try to cling on to power in an election on Nov. 29 — insisted that the budget is way too small.

“It is a distribution of misery,” he told fellow leaders during the discussions, according to the diplomats. He was joined by Italy’s right-wing Prime Minister Giorgia Meloni — an ideological foe on most issues, but an ally of sorts in the budget battle. She insisted that no further cuts to the budget will be accepted.

To bring sides together closer to a deal, Costa promised to advance progress on EU-wide taxes, or own resources, to finance the next seven-year budget and reduce national contributions.  

He will explore the European Parliament’s proposed taxes on crypto firms, online gambling and tech giants as well as a Greek idea to funnel future national sales of 6G mobile spectrum to the EU budget.

But given the level of opposition, getting EU countries to agree to any of these options will no be no mean feat.

“It is time to be realistic and work on what is plausible and reasonable, instead of wishful thinking,” said another EU diplomat.

Fonte: POLITICOPolitics » POLITICO