The European Union: The Budget

Sunday, 6 May 2018 - 02:18 pm (CET/MEZ) Berlin | Author/Destination:
Category/Kategorie: Editorial, European Union, General

(Latest update: 18 December 2020) Now it’s back to business: The European Commissioner for Budget and Human Resources Günther Oettinger has presented the draft of the new EU budget and as we already know: Money can end friendships. This is no different between EU member states than between companies and private persons. However, this is not just an annual plan, but a five-year plan, this time with significantly changed circumstances to the previous plans, so that the negotiations until the unanimous decision-making will be infinitely long.

Some reasons are:

This is the initial plan. It will be interesting to see what will ultimately be implemented or how the overall result will look like, because, of course, all the usual suspects have already expressed “concerns, rejections and claims for improvement”. However, with all the expected cackling, one can remain relaxed as an observer insofar as everything will continue as usual even without a new and adopted EU budget, because there is a mechanism for it as well: From 2021 onwards, the budget adopted for the financial year 2020 (minus the UK share) would be the basis and be repeated endlessly over the coming years until a new budget has been adopted unanimously.

The European Union has a budget to pay for policies carried out at European level (such as agriculture, assistance to poorer regions (including those regions in the UK, which mostly voted in favour of the Brexit), trans-European networks, research, some overseas development aid) and for its administration, including a parliament, executive branch, and judiciary that are distinct from those of the member states. These arms administer the application of treaties, laws and agreements between the member states and their expenditure on common policies throughout the Union. According to the European Commission, 6% of expenditure is on administration, compared with 94% on policies.

The EU budget is proposed annually by the European Commission. The proposed annual budget is then reviewed and negotiated by the Council of the European Union (which represents member states’ governments) and the European Parliament (which represents EU citizens). In order for the budget to be finalised, consensus of all member states is required. The annual budget must remain within ceilings determined in advance by the Multiannual Financial Framework, laid down for a seven-year period by the Council (requiring the unanimous approval of every Member State) with the assent of the Parliament. The budget for a year is determined in advance, but final calculations of payments required from each member state are not completed until after the budget year is over and information about revenue and expenditure is available, and correction mechanisms have been applied.

Media coverage: The Guardian, 17 January 2019: MEPs back plans to cut funds for EU states who weaken rule of law, Politico.eu, 16 September 2019: Germany fights to limit EU spending in long-term budget, Politico.eu, 30 October 2019: Commission gives up on EU budget deal in 2019, Politico.eu, 4 November 2019: The EU’s budget tribes explained, European Parliamant, 15 November 2019: EU Budget 2020 conciliation talks suspended, Council of the EU, 18 November 2019: 2020 EU budget: Council and Parliament reach agreement, Reuters, 19 November 2019: EU reaches deal on 2020 budget, boosts funds for climate change, EU borders, Politico.eu, 2 December 2019: EU budget fight heats up, Politico.eu, 6 December 2019: What rich countries get wrong about the EU budget, Reuters, 12 December 2019: EU leaders offer money to reluctant east to push 2050 climate neutrality, Politico, 24 January 2020: Mafia harvest rewards from EU farm funds, Politico, 25 January 2020: Charles Michel calls special summit on EU budget, Politico.eu, 2 February 2020: 15 countries fight to protect EU cohesion funding, Politico.eu, 6 February 2020: EU budget battle joined ahead of summit showdown, Politico.eu, 13 February 2020: ‘Epic battle’ over green farming divides EU departments, Politico.eu, 14 February 2020: 8 takeaways from the new EU budget proposal, The Guardian, 16 February 2020: ‘Fighting like ferrets in a bag’ as EU tries to plug Brexit cash hole, Politico.eu, 18 February 2020: EU budget talks: The essential guide, Politico.eu, 19 February 2020: Merkel: EU budget talks will be ‘very tough and difficult’, Politico.eu, 19 February 2020: Charles Michel plots ‘miracle’ EU budget deal, Politico.eu, 19 February 2020: Top 5 EU budget tricks, Politico.eu, 19 February 2020: EU budget summit: Live blog, Politico.eu, 20 February 2020: Struggle over Rail Baltica spills into Brussels budget fray, Politico.eu, 20 February 2020: Mario Monti: Don’t let the ‘frugals’ rule the budget, Politico.eu, 20 February 2020: Parliament’s EU budget strategy: Go big, then go home, Politico.eu, 21 February 2020: More slumber than numbers at EU budget summit, BBC, 21 February 2020: Talks end amid stand-off between ‘frugal’ and other nations, The Guardian, 21 February 2020: EU summit collapses as leaders struggle to fill €75bn Brexit hole, Gulf Times, 22 February 2020: EU leaders make last-ditch push for budget ‘miracle’, Politico.eu, 22 February 2020: No budging from leaders means no EU budget (yet), Politico.eu, 30 March 2020: EU budget to be at ‘heart’ of coronavirus response, von der Leyen says, Politico.eu, 5 April 2020: EU budget must be geared for coronavirus recovery, says von der Leyen, Politico.eu, 6 April 2020: EU budget won’t be corona-era Marshall Plan, Politico.eu, 8 April 2020: Eurogroup talks to save EU economy gridlocked over credit lines, corona bonds, Politico.eu, 15 April 2020: Von der Leyen calls for ‘huge’ initiative within EU budget, Politico.com, 17 April 2020: EU should back ‘recovery bonds’ in response to coronavirus, says European Parliament, Politico.eu, 20 April 2020: Merkel backs EU bonds to fight coronavirus crisis, Der Spiegel, 20 April 2020: European Commissioner for Financial and Economic Affairs: “The EU Cannot Afford to Get Bogged Down in Past Discussions”, Politico.eu, 21 April 2020: Joint response to coronavirus crisis will benefit all EU countries, Politico.eu, 21 April 2020: EU leaders draft coronavirus recovery plan, Politico.eu, 22 April 2020: If you want a bailout in Europe, don’t use tax havens, Reuters, 23 April 2020: EU’s von der Leyen sees 2-3 year hike in EU budget firepower, Politico.eu, 23 April 2020: If you want a bailout in Europe, don’t use tax havens, Reuters, 23 April 2020: EU leaders agree on need for EU recovery fund, says Merkel after talks, Politico.eu, 23 April 2020: Commission to present budget and coronavirus recovery plan on May 6, France24, 23 April 2020: EU agrees trillion euro Covid-19 rescue deal – but procrastinates on details, NPR, 23 April 2020: EU Leaders Fail To Agree On Coronavirus Economic Recovery Program, The Guardian, 23 April 2020: Coronavirus delivers a ‘moment of truth’ on the meaning of the EU, Irish Times, 24 April 2020: Coronavirus: EU leaders reach agreement on everything but the big stuff, Politico.eu, 24 April 2020: EU leaders back budget reboot for coronavirus recovery, Al Jazeera, 24 April 2020: EU urged to attach ‘green strings’ to members’ cash handouts, Politico.eu, 30 April 2020: MEPs to Czech PM: Bow out of EU budget talks over conflicts of interest, France24, 27 May 2020: EU Commission proposes €750 billion recovery fund in wake of Covid-19 crisis (congratulations to this sensationally good proposal with a lot of foresight and future orientation or according to the American motto “go big or go home!”), BBC, 27 May 2020: Von der Leyen calls €750bn recovery fund ‘Europe’s moment’, CNN, 27 May 2020: EU plans to raise $825 billion for coronavirus relief. Hard-hit countries need help soon, The Guardian, 27 May 2020: European commission: ‘Defining moment’ as EU executive pushes for €500bn in grants, The New York Times, 27 May 2020: A €750 Billion Virus Recovery Plan Thrusts Europe Into a New Frontier, The Washington Post, 27 May 2020: E.U. proposes $825 billion coronavirus rescue plan giving Brussels power to raise money for first time, BBC, 28 May 2020: EU budget: Who pays most in and who gets most back?, Politico.eu, 11 June 2020: EU leaders deeply divided on recovery budget, Michel tells Parliament, Politico.eu, 16 June 2020: New factions emerge in EU recovery fund fight, France24, 19 June 2020: Merkel urges EU to agree on €750 billion recovery plan by end of July, DW, 19 June 2020: EU leaders hold virtual summit on coronavirus recovery plan, The Guardian, 19 June 2020: Angela Merkel fears economic crisis is being underestimated in EU, France24, 19 June 2020: Divided EU leaders face challenges on Covid-19 stimulus package, Politico.eu, 19 June 2020: In budget summit, EU leaders live up to low expectations, Politico.eu, 24 June 2020: Hey, big spender! EU prepares to splash the cash (it is becoming increasingly clear that it is once again time for big pictures and visions of an integrated EU and that real leaders must courageously go ahead, take the EU population with them, animate them, cheer them up – just as outstanding coaches in team sports have to do it in order to ultimately win the trophy. Because of and through Corona, the EU has once again been “given” a time window for major changes. This means that the most important basic requirements are already in place: money is there, there is general consensus, there is a spirit of optimism right up to impatience, and there is pressure to change for years. There is a lot to do, but it can be taken as a very positive challenge because it means work for everyone. What does it start with? Development clear specifications and requirements for the individual departments (economy, education, social issues, environment, digitization, EU defense etc.). After that, only one thing is missing, namely the starting shot! It is actually very simple and only needs to be done), The Guardian, 29 June 2020: Poland should get less from Covid-19 fund due to rights record, claim EU member states (rightly so. As the Poles claim that they are a Christian nation (according to their reactions on the migration crisis, they don’t even have the slightest idea what Christian values are), they should know the biblical “eye for an eye” concept pretty well), Politico.eu, 29 June 2020: Merkel’s Dr. No gets his toughest mission yet, DW, 2 July 2020: Germany takes helm of EU presidency, Merkel urges resolve on virus recovery plan, Politico.eu, 3 July 2020: European Parliament leaders in Spanish spat, Politico.eu, 4 July 2020: EU budget rules to come back after crisis: Dombrovskis, Politico.eu, 7 July 2020: Why the recovery fund won’t work, Politico.eu, 9 July 2020: European Parliament clashes with Merkel over rule of law in budget talks, Politico.eu, 9 July 2020: Merkel sees tough road to EU budget and recovery deal, Politico.eu, 10 July 2020: Charles Michel’s small cuts set stage for big EU budget fight, Politico.eu, 10 July 2020: Rutte says Michel’s EU budget plan is an improvement, The Guardian, 12 July 2020: EU leaders are split over coronavirus recovery, DW, 13 July 2020: German Chancellor Angela Merkel says EU leaders ‘remain apart’ on coronavirus recovery deal, France, 13 July 2020: EU summit may not reach recovery fund deal: Merkel, Politico.eu, 15 July 2020: The coronavirus recovery plan that von der Leyen built, DW, 16 July 2020: Germany finds new coronavirus generosity ahead of EU summit, Politico.eu, 16 July 2020: Live blog: EU summit on budget and coronavirus recovery fund, Politico.eu, 16 July 2020: The EU’s budget fight — by the numbers, DW, 17 July 2020: EU leaders meet for ‘very difficult’ coronavirus recovery talks, France24, 17 July 2020: EU leaders open tortuous talks on controversial Covid-19 rescue plan, BBC, 17 July 2020: EU’s ‘moment of truth’ as leaders seek Covid funding deal, The Guardian, 17 July 2020: After bumps, bows and birthday gifts, EU leaders get down to business, Politico.eu, 18 July 2020: EU leaders call it a night after Dutch block in budget talks, Irish Times, 18 July 2020: EU member states at loggerheads over fund in ‘moment of truth’, DW, 18 July 2020: EU summit: ‘New proposals’ seek way round Dutch roadblock to recovery plan, Politico.eu, 18 July 2020: Live blog Day 2: EU summit on budget, coronavirus recovery fund, The National, 18 July 2020: Deadlock as EU’s Covid-19 bailout summit stretches into second evening, Politico.eu, 19 July 2020: Viktor Orbán: I don’t know why Mark Rutte hates me and Hungary, France24, 19 July 2020: EU summit drags on for third day over controversial Covid-19 rescue plan, DW, 19 July 2020: EU summit: Angela Merkel warns of possible no deal on recovery aid, BBC, 19 July 2020: Coronavirus: Third day of wrangling over huge EU recovery plan, The National, 20 July 2020: EU struggles to agree on recovery deal as global deaths surge, Politico.eu, 20 July 2020: Live blog Day 3: EU summit on budget, coronavirus recovery fund, The Guardian, 20 July 2020: EU leaders in bitter clash over Covid-19 recovery package, France24, 20 July 2020: Macron clashes with Rutte and Kurz at EU summit, The National, 20 July 2020: EU leaders fail to reconcile differences over recovery fund as talks continue, Al Arabiya, 20 July 2020: Coronavirus: EU grapples with ‘mission impossible’ at deadlocked recovery summit, Politico.eu, 20 July 2020: EU leaders see path to budget-and-recovery deal, France24, 20 July 2020: EU leaders deadlocked in talks over Covid-19 recovery plan, Politico.eu, 20 July 2020: Why the EU can’t agree on anything, France24, 20 July 2020: Dutch PM Mark Rutte, the thrifty europhile holding Europe hostage, Politico.eu, 20 July 2020: Live blog Day 4: EU summit on budget, coronavirus recovery fund, CNN, 20 July 2020: EU’s future at stake as tempers fray over recovery fund, The Guardian, 20 July 2020: EU Macron seeks to end acrimony as pandemic recovery fund summit enters fourth day, France24, 21 July 2020: EU leaders agree landmark 750 bn euro recovery deal (in the light of the previous, unworthy monkey business of the “stingy four” and the “new Eastern bloc”, one can hardly speak of a success. A lot of porcelain has been smashed unnecessarily and this has damaged the image of the EU internationally. Only people who have no idea how important the EU really is to their allotment gardens can act so unintelligent), BBC, 21 July 2020: EU agrees €750bn virus recovery fund, The Guardian, 21 July 2020: EU Leaders seal deal on €750bn Covid-19 recovery plans, France24, 21 July 2020: EU leaders adopt Covid-19 rescue package after marathon summit, BBC, 21 July 2020: Coronavirus: EU leaders reach recovery deal after marathon summit, Politico.eu, 21 July 2020: Toward an ever closer imperfect union, CNN, 21 July 2020: EU leaders have reached an agreement on a $858 billion coronavirus stimulus package, France24, 21 July 2020: It’s a ‘deal’ as EU leaders end marathon summit with historic rescue package, Politico.eu, 21 July 2020: EU leaders agree on €1.82T budget and coronavirus recovery package, France24, 21 July 2020: EU rescue deal: ‘The most important moment in the life of our Europe,’ says Macron, The New York Times, 21 July 2020: E.U. Adopts $857 Billion Stimulus to Fight Coronavirus Recession, The Washington Post, 21 July 2020: E.U. leaders agree to $859 billion stimulus package, Politico.eu, 21 July 2020: POLITICO’s guide to the EU budget deal, The Guardian, 22 July 2020: With its recovery deal, is the EU finally starting to act like a unifying force?, Arab News, 23 July 2020: Why EU’s historic breakthrough is a major milestone, Politico.eu, 24 July 2020: EU summit insults and rubbish superheroes, Politico.eu, 24 July 2020: EU says landmark budget deal adds pressure on UK in Brexit talks, Politico.eu, 24 July 2020: Charles Michel, the budget deal and the art of the terrace tête-à-tête, France24, 25 July 2020: EU recovery plan deals a blow to popular Erasmus exchange programme, Politico.eu, 25 July 2020: The EU budget and recovery deal — in charts, The National, 26 July 2020: How much will the EU’s ‘historic’ new deal change life in Europe?, The Washington Post, 26 July 2020: Is Europe finally coming together?, Politico.eu, 29 September 2020: Poland, Hungary to set up rule of law institute to counter Brussels (of course, no extreme right-winger worldwide ever lived a law abiding life ever, even though they expect it from everyone else. The autocrats from the “new eastern block” are a bunch of weirdos and, on top, using the term “double standard” shows the full scale antisemitism in the east, by trying to equate themselves to the persecution of the Jews – typical brownshirt BS), The Guardian, 30 July 2020: Can Germany now hold the European team together?, Financial Times, 9 August 2020: National budget rules to remain suspended next year, Brussels says, Politico.eu, 18 September 2020: Poland joins Hungary in threatening to block EU’s budget and coronavirus recovery package (surprise, surprise .. that the EU treaties allow offenders to determine their own punishment is somewhat remarkable), DW, 29 September 2020: Hungary’s Orban calls for removal of EU Commissioner Vera Jourova, The Guardian, 29 September 2020: German compromise on releasing EU funds ‘caves in to Viktor Orbán’, Politico.eu, 30 September 2020: Poland and Commission clash over official accused of harassment at EU body, Politico.eu, 30 September 2020: Live blog: European Council summit
communication_2020_rule_of_law_report_en

DW, 2 October 2020: Opinion: This isn’t how the EU increases its international influence, Reuters, 5 October 2020: EU budget rules to remain suspended in 2021: Commission, Politico.eu, 9 October 2020: As EU debates rule of law, Norway’s already making offenders pay, Politico.eu, 13 October 2020: Poland threatens to veto EU budget over rule of law (no problem. As a countermeasure, Brussels can stop all payments of development aid to Poland. As a result, the Polish economy will collapse within two years. Congrats, Kaczyński. Well done), Politico.eu, 20 October 2020: Parliament set to climb down in EU budget fight, DW, 21 October 2020: EU agriculture policy: What are the bones of contention?, DW, 21 October 2020: Opinion: EU fails to introduce real agricultural reform, Politico.eu, 30 October 2020: Cash clash and coronavirus lockdowns: Budget talks head into November, Politico.eu, 9 November 2020: Orbán threatens to veto EU budget, recovery fund over rule of law (that’s easy to solve. The payments to Poland and Hungary will be frozen until the matter is resolved to create enough time for renegotiations. In the meantime, the other states will receive the agreed funds in return for agreeing to the rule of law clause. The EU must clearly oppose the constant attempts of blackmail from the EU’s eastward expansion and south-east Europe, if only in the interests of its own ability to act), Politico.eu, 10 November 2020: Council and Parliament reach deal on EU budget, Politico.eu, 10 November 2020: EU budget deal: What you need to know, DW, 16 November 2020: Poland and Hungary veto EU budget plan, BBC, 16 November 2020: EU budget blocked by Hungary and Poland over rule of law issue (the main question is how one can take Poland and Hungary out of the disbursement processes and freeze disbursements in such a way that it continues to run normally for the other EU states, while Poland and Hungary gain time to find out whether they want to remain in the EU or to leave. Such a process can take years. Years during which the Polish and Hungarian governments would have to explain to their people why they had ruined their countries and given up democracy in favor of kleptocracy), The New York Times, 16 November 2020: Hungary and Poland Threaten E.U. Stimulus Over Rule of Law Links, Politico.eu, 16 November 2020: Hungary and Poland block EU coronavirus recovery package, NPR, 17 November 2020: Hungary And Poland Block EU Budget With Pandemic Relief Funds For Hard-Hit Nations, DW, 17 November 2020: Germany remains optimistic after EU budget veto, Politico.eu, 17 November 2020: EU’s €1.8T game of chicken over budget and coronavirus fund, DW, 19 November 2020: Hungary, Poland hold EU hostage over budget (the EU25 should think much more about how to get rid of Hungary and Poland (possibly also Slovenia) as quickly as possible. The easiest way to get there would be to completely stop the payment of EU funds to the two countries, both from the Corona aid fund and from the budget, while excluding them from all decision-making processes. Poland would be bankrupt within a few months, the leadership of which will then lead the mock battle over alleged German war reparations, but to do so would have to terminate all contracts with Germany and de facto split up Poland in order to create the necessary basis and Hungary’s leadership has been in Putin’s pocket for years which is why it has wanted to cause the EU the greatest possible damage for years. In addition, Orban’s ramblings about Hungary as an alleged “freedom fighter” can then come true. At the same time, one has to wonder how much his voters must be blinded when they confuse Orban’s autocratic kleptocracy with freedom), Politico.eu, 19 November 2020: Hungary and Poland must back down in EU budget fight, says Romania’s PM, France24, 20 November 2020: ‘We will work relentlessly to find the solution’: EU’s Sefcovic on rule of law crisis, Politico.eu, 20 November 2020: EU will eventually resolve budget deadlock, Hungary’s Orbán says, France24, 20 November 2020: EU co-operation crisis: Hungary, Poland veto EU budget over rule of law, DW, 21 November 2020: Opinion: What role will the EU play in foreign affairs?, DW, 26 November 2020: Hungary, Poland vow to veto EU COVID recovery fund mechanism, Politico.eu, 26 November 2020: Hungary and Poland escalate budget fight over rule of law, Politico.eu, 27 November 2020: Europe: Caught between a rule-of-law fight and a hard Brexit, Politico.eu, 30 November 2020: Merkel says ‘all sides’ must make compromises to break budget deadlock, The Guardian, 1 December 2020: Von der Leyen Hungary and Poland should take EU budget row to court, The Guardian, 1 December 2020: An effective response to Europe’s fiscal paralysis, Politico.eu, 2 December 2020: Von der Leyen threatens EU recovery fund without Hungary and Poland (very good approach. The EU should even go further and organize the budget until 2027 without Poland and Hungary. This would mean that both countries could think about whether they want to continue to belong to the EU by 2027 – of course without receiving the previous, lavish support from Brussels, which in Hungary alone finances 50% of all infrastructure measures. Poland and Hungary are the largest net recipients of Brussels development aid payments. Their populations will certainly react enthusiastically to the complete failures of their national leaderships if they are missing several 100 billion euros in their budget over the period), DW, 2 December 2020: Poland and Hungary gamble on funding with EU budget veto, Politico.eu, 3 December 2020: Poland blinks first ahead of showdown at the EU budget corral, DW, 4 December 2020: Viktor Orban: Hungary will stick by EU budget veto threat (hopefully it stays that way. The money that Brussels doesn’t spent on Hungary and Poland can be spent on meaningful projects in other EU states instead), Politico.eu, 4 December 2020: Viktor Orbán rejects rule of law compromise idea, DW, 8 December 2020: Poland, Hungary face growing calls to drop EU budget veto, DW, 9 December 2020: Hungary’s budget veto leaves Orban isolated, France24, 9 December 2020: Poland, Hungary accept German EU budget offer as ‘D-Day’ approaches, DW, 10 December 2020: EU breaks deadlock on budget, coronavirus recovery fund, Politico.eu, 10 December 2020: Europe’s existential crisis, France24, 11 December 2020: EU reaches landmark budget deal with Hungary and Poland, Politico.eu, 11 December 2020: EU leaders move toward sanctioning Turkey, The Guardian, 11 December 2020: Poland Rule of law fears remain despite EU compromise, Politico.eu, 11 December 2020: EU leaders demand banking union progress, NPR, 11 December 2020: EU Ends Standoff, Moves Forward With Budget And Coronavirus Relief Fund, Politico.eu, 15 December 2020: Jourová: EU won’t use rule of law powers in ‘activist’ way, Politico.eu, 17 December 2020: EU top court gears up for rule-of-law battle (of its life), Politico.eu, 18 December 2020: EU recovery fund deal may get money flowing in summer.

This is the analyses of the EU budget proposal from 2018. Let’s wait an see how the EU budget 2021 – 23027 will really look like:

EPRS_IDA(2018)625148_EN


Read more on europa.eu – Budget, Europa.eu: What’s next? The InvestEU Programme (2021-2027), Wikipedia Budget of the European Union, VOLT Europa, United Europe and Pulse of Europe.


Overview EU series:

Budget 2014–2020
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White_Paper_on_the_future_of_Europe


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