EU wants more money for European Defense Fund, Green Deal
A summit of top European Union leaders failed on Friday after German Chancellor Angela Merkel and other heads of government left the conference without an agreement on how to fill the hole created in the bloc’s budget by Britain’s exit. The leaders of 27 EU member states had gathered in Brussels to finalize the trillion-dollar-budget for the next seven years.
“Unfortunately we have observed that it is not possible to reach an agreement,” said Charles Michel, chief of the European Council, EU’s executive arm. “European budget is a very difficult topic and very difficult negotiation especially after Brexit and the gap it has left, between €60 and €75 billion,” he added.
The United Kingdom was one of the largest net contributors to the EU besides Germany and France. With the UK leaving the bloc on February 1, Brussels is struggling to fill the $81 billion (€75 billion) deficit in its post-Brexit budget.
Germany, France, and other wealthy European nations are expected to foot the bill for an ever expanding EU budget. “Germany, the Netherlands, Denmark, Sweden, and Austria would be financing 75% of all net payments to the EU,” Forbes magazine reported. Berlin might have to pay an additional $14 billion, taking its contribution to the 2012-27 budget to over €42 billion, German newspaper Rheinische Post disclosed recently.
Germany’s Deutsche Welle reported the details of the failed summit:
European Union leaders failed to agree on its new 7-year budget on Friday. A a result, a new summit will have to occur in the coming weeks.
The 27 leaders of all member states had spent two days in a standoff over the 2021-27 allowance, with a significant gap between countries that are net recipients of funds and the wealthier member states who are keen to rein in spending.
German Chancellor Angela Merkel said the difference between the member states was too big to compromise on while the EU Council President Charles Michel said: “We need more time.”
The new budget has a Brexit-sized hole to fill and some member states were unwilling to pay more for the bloc’s next spending proposals, worth around €1 trillion ($1.1 trillion).
Council President Michel added: “Unfortunately today, we have observed it was not not possible to reach an agreement.”
It was not clear exactly when a new round of talks would take place.
The so-called “Frugal Four” of Austria, Denmark, the Netherlands and Sweden, as well as a few other nations, believe the EU’s 2021-2027 budget, which is intended to finance ambitious climate change and digital economy policies, should amount to 1% of the bloc’s gross national income.
The EU wants billions of euros for its ambitious ‘Green Deal’ program to fight climate change. “The new European Commission wants to do more for climate and environmental protection with a ‘Green Deal’,” German Deutsche Welle reported in separate article.
In its 2021-27 budget, Brussels also needs money for ‘joint defense’ — a long-held EU dream of creating its own centralized army. The budget draft reportedly calls for €7 billion for the European Defense Fund. It is interesting to note EU’s growing military ambitions coincide with many of the EU member countries, including Germany and France, defaulting on their NATO-agreed 2 percent of GDP on defense.
With the rise of right-wing and anti-establishment parties across Europe, many of the net contributors find it difficult to justify signing fat checks towards financing a bloated EU bureaucracy. Austria’s Prime Minister Sebastian Kurz urged the EU to cut back on its budget in light of Brexit. “Now that we have a smaller union of 27 member states, we simply have to cut our coat according to our cloth. The responsible approach in this situation is to prioritise in the interest of our taxpayers,” Kurz wrote in an op-ed ahead of the EU summit.
The EU budget summit collapsed at a time when Brussels is trying to squeeze $50 billion as part of the Brexit ‘divorce settlement.’ Despite making huge financial demands, the EU is forcing the UK to subject its economy to laws and regulations set by Brussels in order to secure a trade deal with the bloc — a move opposed by Prime Minister Boris Johnson. “There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar any more than the EU should be obliged to accept UK rules,” Johnson declared earlier this month.
[Cover image via YouTube]
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