By Jorge Liboreiro
If there’s something in Brussels that’s inexorably bound to create problems is money.
Talking about money triggers the rawest emotions and the fiercest reactions from governments: political ideologies, financial track records, geographical location, constitutional traditions and ancient lore are vehemently invoked to make demands, reproaches and accusations. A cacophony ensues, with rampant finger-pointing and parting shots. Dirty laundry is aired in public (much to the spectator’s chagrin) and diplomatic negotiations quickly descend into ruthless tribal fighting.
In short, it gets nasty.
Reminder: back in 2020, mask-clad EU leaders spent five consecutive days locked in together until they agreed on a €1.8 trillion budget for the next seven years. Those talks, which included the history-making €750-billion recovery plan, were so arduous and draining that nobody has since then dared to touch the budget, fearing doing so would unleash the beast.
Ursula von der Leyen, however, is willing to open Pandora’s box.
In a high-stakes gamble, the president of the European Commission has proposed a nearly €100-billion top-up to the EU’s long-term budget to cope with new challenges such as Russia’s war on Ukraine, irregular migration and disruptive high tech. “We’re in a completely different world compared to 2020,” von der Leyen said in June, when she first unveiled her proposal. The unending succession of crises that bloc has faced in the past three years, she said, has pushed the common budget to the extreme, with no room for manoeuvre left behind.
But member states are not buying it.
“I think that the priorities defined by the European Commission (...) are the right ones. The amount proposed today seems too high to me and therefore we have asked for a reduction," French President Emmanuel Macron said during last week’s summit.
Amid an economic slowdown, steep energy prices and tighter monetary policy, von der Leyen’s multi-billion pitch has been met with suspicion and perplexity by most EU leaders. In a brazen attempt to get themselves off the hook, governments are now asking Brussels to look under the mattress and use existing cash to cover the new expenses.
“For many member states, Germany included, it’s not understandable that we should always increase the budget. It’s essential that we look at the available funds and how it can be reallocated or used differently,” said German Chancellor Olaf Scholz.
“What we’re saying is: reprioritise, reprioritise, reprioritise,” declared Dutch Prime Minister Mark Rutte, who famously led the “Frugal Four” coalition during the 2020 negotiations.
His Belgian counterpart, Alexander De Croo, made no secret of his distaste for the top-up, warning that if his country were to pay up its required share, it would violate the bloc’s fiscal rules. “What’s on the table is not acceptable for us,” said De Croo.
The comments spell bad news for von der Leyen, who is pushing to have the top-up approved by year’s end. Even the €50-billion facility to support Ukraine in the long-term, which is so far the most popular envelope, could be in trouble after Hungarian Prime Minister Viktor Orbán publicly threatened to wield his veto and block the initiative. (Budget matters require unanimity.)
But the president won’t go down without a fight. Speaking to reporters after last week’s EU summit, von der Leyen cautioned about the dangers of “trade-offs,” an euphemism for budget cuts. In an estimation sent to member states, the Commission said that financing the entire top-up through redeployments would entail a “general cut” of more than 30% in well-known programmes such as Erasmus+ and Horizon Europe.
The caveat was echoed by Roberta Metsola, the president of the European Parliament, who said leaders should think twice before making rushed decisions that could backfire before the EU elections in early June.
“We absolutely cannot tell our citizens that, on the one hand, we’re willing not to spend anymore but, at the same time, we cannot find a solution to pay because we are, let’s say, over-extended in terms of our debt,” Metsola said after taking part in the summit.
“I don't see a way out yet.”
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Brussels dares open Pandora’s box
