Belgium (Brussels Morning Newspaper) The European Union’s budget could suffer annual cutbacks of at least €15 billion if new own resources are not secured by 2027, leaving Member States with the choice of shouldering a heavier financial burden or facing reduced funding for crucial programs. José Manuel Fernandes MEP, the EPP Group Spokesman on Budgets, issued this warning ahead of the expected release of proposals for new own resources by the European Commission.
The repayment of borrowing costs associated with the EU’s COVID-19 recovery fund, NextGenerationEU, is estimated to be €15 billion per year until 2058, amounting to roughly 10 percent of the EU Budget.
Fernandes highlighted the pressing issue, stating, “In the current long-term EU Budget Multiannual Financial Framework (MFF), we are only covering the cost of the debt. However, with increasing interest rates, the burden of repaying the debt may double compared to initial projections, potentially reaching €30 billion by 2027! What is even more concerning is that beyond 2027, the EU will have to repay not only the debt’s cost but the debt itself. It is imperative that we adequately prepare or face significant cutbacks in EU funding.”
The EPP Group, known for its influence in the European Parliament, will assess the proposals for a second basket of new own resources released today. While generally reluctant to support own resources that impose additional burdens on citizens and small and medium-sized enterprises (SMEs), the EPP Group seeks resources that can generate revenue, foster fair competition, and address the EU’s political priorities, notably climate change.
The European Commission’s proposals for new own resources are expected to play a critical role in alleviating the financial strains faced by the EU and its Member States. As the EU strives to recover from the COVID-19 pandemic and meet ambitious objectives, finding sustainable and effective solutions to budgetary challenges becomes all the more essential.
The coming months will likely witness intense debates and negotiations among Member States as they grapple with the question of how to secure new own resources while ensuring economic stability, fair distribution of financial responsibilities, and the ability to finance critical initiatives. The decisions made will have a profound impact on the EU’s ability to meet its obligations and tackle the pressing issues of our time.