Discussions over the seven-year EU Budget for 2014 to 2020 appear to have reached a stalemate as member states continue to be deeply divided into two groups of contributors and beneficiaries.
During a meeting of the EU’s General Affairs Council this week, the division between the two sides was evident.
Net contributor countries insisted on cuts in funding while the cohesion-friendly countries, including Malta, called for current funding levels to be preserved.
The meeting, attended by Malta’s Foreign Minister Tonio Borg, provided an opportunity for those in favour of “spending better” (Austria, Germany, Finland, France, Italy, Netherlands and Sweden) to confront the “friends of cohesion” – Bulgaria, Estonia, Greece, Hungary, Lithuania, Latvia, Malta, Poland, Portugal, Romania, Slovenia and Slovakia.
With austerity measures being introduced throughout the EU, a number of member states such as Finland, Sweden, the United Kingdom, the Netherlands, Germany and Italy have criticised the introduction of a category of “intermediary regions”.
Those defending this category consider it necessary to focus one’s efforts on the poorest EU regions.
In order to ensure that their regions receive at least a minimum level of funding, a number of countries have put forward the idea of a floor “safety net” (for the moment, 55 per cent of amounts allocated between 2008 and 2010).
This has given rise to the proposal which could be attributed to Germany, of an “inverted safety net” – capping of allocations for the next programming stage but without figures being set as yet. During the talks, however, many countries, including Poland, Belgium, Italy, Slovenia, Bulgaria and Spain, criticised the idea of this digressive safety net.
The principle of macroeconomic conditionality – the suspension of structural funds for a country that has breached the Stability and Growth Pact rules – is still making life difficult for the Danish presidency.
A clear dividing line is taking shape between those in favour of spending better, who uphold the principle, and those who are friends of cohesion, including Malta, and who call for more reflection to ensure the mechanism is used equitably and who want conditionality to concern only future commitment appropriations and not payment appropriations.
The Danish presidency is aiming at concluding the preliminary discussions on the EU seven-year Budget by the end of June. However, this is proving to be much more difficult than anticipated.
Member states are supposed to conclude the 2014-2020 Budget talks by the end of this year.