EU sets out €1,135bn budget to do ‘more for less’

3 May 18

The European Union has set out its budget for 2021 to 2027, focusing on sound financial management with an aim to do “more for less”.

The proposed budget includes a new mechanism to protect the EU budget from financial risks linked to the different legal systems between member countries.

This will allow the bloc to suspend, reduce or restrict access to EU funding if countries fail to respect the rule of law.

European Commission president Jean-Claude Juncker said: “With [the] proposal we have put forward a pragmatic plan for how to do more with less.

“The economic wind in our sails gives us some breathing space but does not shelter us from having to make savings in some areas.”

He added: “We will ensure sound financial management through the first ever rule of law mechanism.

“This is what it means to act responsibly with our taxpayers' money. The ball is now in the court of Parliament and Council. I strongly believe we should aim to have agreement before the European Parliament elections next year,” he added.

The rule of law mechanism, as proposed in the budget, means that countries could lose EU funding if they are in disputes over their national laws and the alignment to EU law.

For example, Hungary and Poland could see changes to their funding as they are in disputes with Brussels over legislative changes to their national legislation.

These countries are the biggest net recipients of EU aid and have called the move “blackmail”.

“There are treaties in force in the European Union that clearly specify the rights and obligations of EU member states,” Hungarian Foreign Minister Peter Szijjarto told a news conference.

“We do not agree with any proposal that would provide the potential for blackmail of anyone with regard to the payment of EU funds that are due to be given to countries based on the treaties,” he said.

The proposal includes a long-term budget of €1,135bn in commitments over the period from 2021 to 2027, equivalent to 1.11% of the 27-member states’ gross national income.

Funding for climate action has also been made a key priority in the budget proposal. In the current budget period of 2014 to 2020, the spending target for climate was 20, to be implemented throughout all spending programmes. The new proposal sets apart 25% of the EU budget for climate action.

This results in a total of €320bn for climate action during the entire period of the next budget.

Climate Action Network Europe’s finance and subsidies policy coordinator Markus Trilling said: “The European Commission acknowledges the EU budget’s role in tackling climate change.

“More money is needed to boost European and international climate action. So far, the green potential of the EU budget has regrettably been untapped.

“It is a good sign that the European Commission considers increasing the share of the future budget dedicated to climate action.”

The budget also includes a new reform support programme, with an overall budget of €25bn, which will offer financial and technical support to member states going through reforms.

The Commission will next announce the detailed proposals for sector-specific financial programmes, before the EU budget goes before the Council and European Parliament.

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