Updated at 7.50pm: adds government statement
The European Commission proposed a bigger new multi-year budget on Wednesday that will trigger battles among member states over how to fill the funding gap left by Britain's exit next year.
The Dutch led the charge for rich northern states unwilling to step into the Brexit breach: "A smaller EU ... should have a smaller budget," Prime Minister Mark Rutte said.
Against that, France's agriculture minister called it "simply unthinkable" to shave 5 percent off Brussels' hefty spending on farm subsidies.
Poland, which the Commission has in its sights with a new mechanism to penalise authoritarian governments that impinge on independent judges, warned of "a long road ahead" to reach the unanimous compromise required to put the budget into effect.
Germany, the biggest paymaster, was cautious, repeating its readiness, like France, to spend more but only if it was "fair".
"With today's proposal we have put forward a pragmatic plan for how to do more with less," Commission President Jean-Claude Juncker told the European Parliament in launching the proposal to spend about 10 per cent more in 2021-27 as a share of output.
Among highlights are sharp increases in spending on border defences against illegal immigration as well as on foreign aid, plus more investment in common EU defence schemes, research and technology and on helping euro zone governments in difficulty.
His plan to spend about 1.11 per cent of the 27 nations' combined economic production compare to 1.03 percent of the pre-Brexit, 28-country Multiannual Financial Framework now in place.
It is worth €1.28 trillion, adjusting for future inflation, or €1.14 trillion at today's prices - about €160 billion a year, compared to €150 billion now.
That, the Commission argues, will be less than a daily cup of coffee for 440 million Europeans and is cheap at the price. National governments typically tax and spend 40 times as much.
BATTLES AHEAD
The proposal asks member states to let Brussels raise new money directly from new taxes on plastics - designed also to help the environment - and on big global tech firms. But it will also require governments in the wealthier west to chip in more as Britain stops paying its annual €10 billion or so.
Some will also see EU rebates phased out over five years.
"A budget for a Europe that protects, empowers and defends," was the Commission's chosen slogan for the day.
That language reflects a campaign from Brussels to persuade voters the bloc remains relevant after a decade of crisis that has seen ferocious austerity in countries hit by the eurozone debt crisis and uproar over the arrival of more than a million irregular migrants across the Mediterranean in 2015 alone.
"A Europe that protects," has also become a familiar demand from French President Emmanuel Macron, as he tries to work with German Chancellor Angela Merkel to tighten integration after the ever-sceptical British have left, while easing fears among voters that the EU means open borders and jobs exported abroad.
Furious battles among member governments, however, may cast a shadow over the Commission's efforts to patch over rifts as Juncker tries to rally east and west, north and south, big and small states behind a post-Brexit relaunch next year.
EU Budget Commissioner Guenther Oettinger, who has called for states to show unprecedented speed and agree the budget within a year or so, said it was inevitable that there will be disputes: "There will be cuts, which many countries will complain about," he told German television. "And there will be new spending, which the others will complain about."
Malta government statement
In a statement on Wednesday evening, the government said Malta has supported an increase in the budget for education and training as well as higher commitments for migration to ensure that the EU is well equipped to be able to react fast to any crisis.
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RULE OF LAW AND FUNDING The introduction of a mechanism by which governments would see EU funds withheld if they are deemed not to be respecting the rule of law - in effect targeting ex-communist states where Brussels sees the independence of judges under threat. EU BORDER GUARDS, MIGRATION AND ASYLUM Spending to almost triple to €33 billion from current €13 billion in order to fund 10,000 border guards by 2027. DEFENCE AND SECURITY In its most ambitious defence plan for decades, the Commission proposed to spend 22 times more than in the 2014-2020 period - some €13 billion - on a joint weapons fund, research, shared financing for battlegroups and allowing a coalition of the willing to conduct more missions abroad. Overall, the next EU budget sets aside €27.5 billion for security and defence over the seven-year period. That includes €2.5 billion for an internal security fund to fight extremism and cybercrime. EUROZONE STABILITY A reform support programme with a €25 billion budget to help EU countries with structural reforms, a new convergence facility to aid non-euro EU countries join the common currency, a European Investment Stabilisation Function, backed by loans guaranteed by the EU budget up to €30 billion, which will grant preferential loans to crisis hit EU countries. FOREIGN AID Funding up by 26 per cent to €123 billion to maintain stability and tackle migration. An off-budget €10.5 billion European Peace Facility to fund schemes with non-EU countries. NEW SOURCES OF REVENUES Some €22 billion annually targeted to be raised from new revenue streams, accounting for about 12 per cent of the total budget, which include EU countries contributing 20 per cent of revenues from emissions trading system auctions, a three percent call rate on a new common consolidated corporate tax base and 80 cents per kilogram of non-recycled plastic packaging waste for a total amount of about €7 billion. EUROPEAN GLOBALISATION ADJUSTMENT FUND €1.58 billion in one-off aid to workers laid off due to adverse developments in global trade and economic disruption FARMING SUBSIDIES Direct payments will be reduced by 4 per cent and better targeted, compulsory capping of subsidies will be imposed at farm level, with funds diverted to smaller farms in the same country. A new crisis reserve would be set up to deal with problems arising from unexpected developments resulting from the actions of non-EU countries. The overall EU agricultural budget will be cut by 5 per cent. DIGITAL NETWORKS AND PROJECTS €12 billion - a ninefold increase RESEARCH AND INNOVATION Funding up by 50 per cent, with €100 billion for flagship programmes Horizon Europe and nuclear research programme. REBATES All rebates to be phased out over five years and the rebate EU countries keep for collecting customs revenues to be halved to 10 per cent from 20 per cent. |