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Michael Clauss has done everything possible to appease MPs. Member states are “extremely reluctant” to agree to a further increase in the next seven-year EU budget. However, he wanted to “go a step further” to convince the EU states, the EU ambassador from Germany wrote: Additional money could be made available for programs that are particularly important to MPs.
The answer came quickly and did not sound friendly. “I am disappointed,” replied Johan Van Overtveldt, head of Parliament’s Budgets Committee, in a letter to Clauss on Thursday made available to SPIEGEL. His proposals are “nothing new” and “unacceptable”. A little later Rasmus Andresen, who is part of the Greens’ parliamentary negotiating team, added: Clauss’s proposals “were not acceptable in any way.” The continuation of the talks makes no sense “if one of the parties barely shows a willingness to compromise.”
The cancellation is politically explosive for Chancellor Angela Merkel. Germany holds the presidency of the EU Council, which rotates every six months until the end of the year, and Merkel is determined to complete budget negotiations by then.
The main reason: if there is no agreement on the seven-year budget of 1.074 billion euros, the Crown aid package of another 750 billion euros will be delayed, money that is urgently needed in countries in crisis. from Italy, Spain and Portugal in particular. However, in the end, the EU Parliament has to approve the budget by majority. And threaten no if your most important demands remain unfulfilled:
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There should be more money for 15 programs than member states have been willing to give so far, for example for health research and policy. To do this, the total volume of the budget must be increased.
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The budget must contain a strict rule of law mechanism: governments that undermine the fundamental values of the EU and the rule of law in their countries must be cut back.
Clauß, however, strictly rejects an increase in the budget. The heads of state and government negotiated for four days and four nights in July to agree on a budget, the ambassador emphasized. If I wanted to untie the pack again, another summit would be necessary. “That would put the entire construction in jeopardy,” Clauss warned. Thus, at best one might think of “adjustments in a limited number of programs” that could lead to additional expenditures “in the order of one billion high digits”. There is talk of about nine billion euros.
Clauss offers 9 billion, Parliament wants 39
But that is too little for MPs. It should be 39 billion euros more, Van Overtveldt replied, in “fresh” money and not, as Clauss suggests, from existing budget margins. In addition, Parliament has already reduced the number of programs it considers key from 40 to 15. Additional financial claims fell from the original 113 billion euros. That corresponds to just two percent of the 1.8 trillion euros for the family package and crown, Overtveldt emphasized.
This increase would only be feasible by reducing other programs or increasing the total budget. The first is rejected by Parliament and the second by the Council of Member States.
An EU diplomat indirectly advised parliament to reread Clauss’s letter carefully. Talk about “creative possibilities” for making improvements to individual programs. This could include revenue from fines to the EU or funds that were not claimed. Until now, Parliament has had a “condensed understanding” of these possibilities.
It is open whether a better understanding of this would be the solution, especially since trench warfare over money is not the only point where negotiations stall. There is an even bigger problem with the rule of law mechanism.
Dispute over withdrawal of money for constitutional sinners
The EU Commission had already proposed in 2018 that member states should cancel the funds if governments there undermine the rule of law, which was primarily aimed at Poland and Hungary. The commission itself must identify violations that member states can only prevent by withdrawing funds with a qualified majority. This plan was already clarified at the EU summit in July: cuts should only be made if a qualified majority of states are in favor, a much bigger obstacle.
The German proposal would further dilute the mechanism: it should be strictly limited to irregularities in the use of EU funds and not apply to general deficits of the rule of law. This has received criticism in the EU Parliament: the rule of law mechanism is no longer a problem, they say. But Clauss maintains: “There can and will not be a mechanism of financial sanctions for member states that do not respect the rule of law,” the ambassador wrote. That’s what Article 7 of the EU treaties is for.
However, Article 7 proceedings have been ongoing against Hungary and Poland for years. They both vanished, much to the chagrin of the majority in the EU Parliament. At least seven member states also find the German proposal too weak, especially the Netherlands. Dutch Prime Minister Mark Rutte recently made clear to his EU counterparts that his parliament will reject Germany’s proposed rule of law mechanism. Just last week MPs in The Hague asked Rutte by resolution to defend a stricter variant.
The toughness of the fronts on this issue will soon become apparent: on Monday, negotiators from Parliament, the Commission and the Member States will meet for the first official negotiations on the mechanism.
