DATE: 26-03-2020

EU budget negotiations marked by Brexit and Corona

After the new commissioners began their work under President Ursula von der Leyen at the end of 2019 and the date for the Brexit had finally been determined, also the negotiations on the Multiannual Financial Framework (MFF) for the years 2021-2027 picked up speed again.

The starting point for the MFF negotiations was a proposal that the European Parliament presented in summer 2019. This provided for a volume of the total budget of 1.2 trillion euros or 1.3% of the economic output of each individual member state. This was countered by the request of some member countries (in particular Denmark, the Netherlands, Austria and Sweden, the so-called 'frugal four') to limit expenditure to 1% of economic output. This would be significantly less than 1 trillion euros.

In the conflict between the extreme positions of the European Parliament on the one hand and the frugal four on the other, the proposal made on 14 February by the new President of the Council of Europe, Charles Michel, to provide for expenditure amounting to 1.074% of economic output seem at first sight a somehow fair and reasonable compromise. However, this proposal does not only envisage a decrease of the overall volume of the budget, but also reallocations within the policy fields, which should benefit from the funding. Above all, Michel suggests setting aside some money for future 'gifts' to be granted to individual member states in the final stages of the negotiations. Although this practice is in line with what the Commission has already done in the past, this has never been done in scope as now suggested by Charles Michel.

According to Michel's proposal, the biggest cuts will still primarily affect agriculture, transport infrastructure and regional funding, whilst culture, education and research still will get off fairly well. However, in contrast to how things looked like only half a year earlier, it is now clear that also funding programs such as Erasmus+, Creative Europe and Horizon Europe will have to face noticeable cuts in terms of absolute numbers, although it is still too early to indicate reliable figures. At its extraordinary meeting on 20 and 21 February, the European Council finally postponed making a decision because the frugal four insisted on their 1% demand.

Since, the world has changed. It can be considered certain that the economic impact of the corona crisis, which was still not an issue at the Council's last meeting, will make it impossible to comply with the previous plans. It can be luckily observed that the particular role and significance of culture and education in times of crisis is acknowledged and appreciated by many and that this conviction is also shared and supported in politics. Nevertheless, it will remain a challenge to make our voices heard so that the sector as a whole does not suffer long-term damage. As usual, we will do our best to advocate for transforming a good will into action.