Will the European Union cope with the recent tensions it is facing?
Following Britain’s exit from the European Union (EU), the member states of the bloc will have to figure out a way to reach a consensus on the new budget, also known as the multi-annual financial framework (MFF). Money talks in the EU have rarely been easy, but this time there is an even bigger tension due to the departure of the United Kingdom (UK), which used to be the member state with the second-largest economy.
The MFF that is in force now will expire at the end of the year, meaning that a new one for the 2021-2027 period will have to be created by then. However, this time things are different. The UK is not going to contribute to the EU budget. According to estimates, this will leave a hole of around £7.8 billion per year. There are suggestions that this figure could be even higher, going up to £62 billion for the whole period of seven years. This has put at stake the financing of key European projects such as the European Green Deal, which aims to make the continent climate-neutral by 2050. The remaining member states are currently discussing how they should tackle this problem. Unfortunately, these negotiations have been characterised by disagreement and suspense between two groups.
One group known as ‘the Frugals’ consists of Austria, the Netherlands, Sweden, and Denmark. The representatives of these countries believe that the budget should consist of 1% of EU’s gross national income, as opposed to the European Commission which has asked for 1.3%. Even though the difference seems small on paper, it equals to billions of euros. The Frugals’ main argument is that the new MFF should represent the shrinking of the EU post-Brexit.
The group of 15 nations whose stance concerning the EU’s new budget is opposing to that of the Frugals is called ‘the Friends of Cohesion’. It consists mainly of poorer Eastern European countries. They have argued that if the MFF for the upcoming years represent 1% of the gross national income of the Union, they would be unfairly targeted. The debate between the two groups has escalated in something of a division between the east and the west. The European Council’s president – Charles Michel, has proposed a compromise of 1.1%, however, he does not have enough support. As a result, the European Council gathered on February 20 to address this problem and reach a consensus on the future budget of the bloc.
The summit continued for two days, ending on Friday 21 February 2020, without an agreement among the European leaders about the Union’s 2021-2027 budget. In fact, it created even more problems as the Frugals and the FoC expressed different opinions on how the MFF should be spent. While the former group believes that more funds should be invested in borders, the latter claimed that more money should be given to the poorer regions of the EU. Angela Merkel, the German Chancellor, stated that the summit was not successful as there were too many differences but added that the topic will be discussed again.
Blog written by Boris Rusev
Photo of EU Flag from: Needpix.com