Brussels (Brussels Morning) Talks on the EU budget have been going since August. The budget deal today foresees the EU’s finances up until 2027. The long-term budget at this stage amounts to just over 1,8 trillion euros, including the corona recovery package worth 750 billion euros in loans and funds.
After a three-day marathon meeting in July, when EU leaders agreed on the outline and set the maximum level of expense, more detailed talks have been underway between the European Parliament and the EU countries. The final budget package still awaits approval by EU leaders at their next summit in December.
Already, Hungary’s Victor Orban has signalled he intends to veto the budget deal and the release of the corona recovery funds since he opposes the rule of law conditions that would apply under the new budget term. Agreement on the EU budget requires unanimity,
At this stage, a rough outline suggests that 30% of the budget would be designated to fighting climate change, the highest share in an EU budget so far. That includes funds to protect biodiversity from eroding further. The idea is to trace the actions under the budget to make sure that at least 30% actually support climate goals and biodiversity.
Over half of the budget falls under research and innovation; the Horizon Europe programme, the EU’s new health programme and Erasmus+ are all winners, along with the digitalisation programme and the EU’s civil rescue programmes.
Still, the traditional EU policies continue to receive substantial support; both regional cohesion and the CAP, the agricultural policy, are prominent budget posts but labelled under new headings of support to green and digital transitions. In addition, EU farmers will get corona support for the next two years worth 8 billion euros.
The European Parliament flags as a win that it did obtain €16 billion on top of the package agreed by EU leaders; €15 billion will reinforce the Green Deal and the Digital Agenda and a further billion euros spent on resilience programmes nationally. The Parliament also insisted on increases to the research budget. Gender equality becomes more important through benchmarking of programmes against their gender impact.
Limits to EU countries’ payments
The EU countries contribute to the budget based on their GNI but in order to limit the ceiling of what countries can be expected to pay, the aim is for more funds by EU taxes and levies.
The Emission Trading System ETC will be reviewed next year and might then include both the aviation sector and maritime transport; based on the future ETS, the Commission might receive further funds of its own through direct levies. Both a carbon adjustment mechanism and a digital levy should bring in budget resources for the EU in a few years’ time.
Another source of resources for the EU could be a financial transaction tax or a corporate sector tax that would go straight into the EU’s coffer, but those taxes would only be decided on in the next five years.
The clause conditioning the disbursement of EU funds against breaches of the rule of law counts from last week, meaning that the EU budget now for the first time would be applying its budget protection mechanism.