The predictions for the chances of agreement are pretty much the same. There will be “the well-known exchange of positions”, then it will be adjourned, Jens Geier is certain, budget expert and head of the SPD group in the European Parliament. The experienced vulture takes part in the whole circus for the second time and points out that in 2013, when there was a similar nagging about the medium-term finances, at a comparable point in time they had already gone further than this time.
The FDP budget expert in the EU Parliament, Moritz Körner, says: “I think it will have to fail once, and then it will work.” “The summit will be canceled on Friday afternoon,” predicts an EU diplomat. In doing so, he bravely contradicts scenarios from a multi-day summit that have haunted Brussels in recent weeks.
Belgian model: negotiate until you drop
The new EU Council President Charles Michel supposedly wanted to negotiate to the point of exhaustion in the typical Belgian manner. When asked whether it was certain that the European heads of state and government could and would really want to culminate for days, an EU official said: “We will not take them hostage.”
An imminent breakthrough cannot be seen, the negotiating positions have hardened. The CSU financial expert in the European Parliament, Markus Ferber, describes the calculation of many summit participants who are counting on softly cooking Germany’s largest contributor in the coming months: “The others expect Angela Merkel to open her heart and wallet.”
AfD lurks for campaign ammunition
The AfD is literally waiting for the negotiations to drag on into the second half of the year when the Federal Republic takes over the EU Council Presidency and has to act as an integral mediator. AfD specialist for EU budgetary issues, Joachim Kuhs, senses election campaign ammunition: “It is to be feared that Germany’s EU Council Presidency in the second half of 2020 will result in the Federal Government opening the wallet of German taxpayers wide again and playing it big as a paymaster , In the future, voters can only prevent this with a strong AfD. ”
“The time for an agreement is now,” insists one senior EU official. “Realism, ambition and fairness” are in demand. Up to 75 billion euros have to be compensated simply because of the Brexit. The new EU Commission has also presented ambitious plans for climate protection and digitization that require staggering sums.
Brexit front crumbles
The few fronts that EU countries built up during the bitter Brexit dispute against British demands were seen as a great success for the internal cohesion of the European Union. Now that the British have left and leave a hole in the EU budget from 2021, the 27 remaining countries are falling apart into individual interest groups.
There are, for example, the “Friends of Cohesion”, friends of regional structural support who do not want to do without their subsidies. On the other hand, there are the “Economical Four”, sometimes “Economical Five”, depending on whether you include Germany or not. Basically, they consist of Denmark, the Netherlands, Sweden and Austria.
The Alpine Republic claims a leadership role in this club. Chancellor Sebastian Kurz wants to profile himself as an iron savings champion. His Brussels workers warned him: Austria could otherwise double its contribution to the budget.
Brussels declares “net contributor” a non-word
A particular piquancy: EU Budget Commissioner Johannes Hahn is an Austrian and has to do a lot of persuasion, especially in his home country. For months he has been traveling across the country with the message that, as in the case of Austria and Germany, one should no longer speak of “net contributors”, that is, countries that pay more into the EU coffers than they get out. This criterion, according to which countries such as Poland, Greece, Hungary, Portugal, Romania and Spain benefit greatly from redistribution, is “no longer valid”. Because the large depositors used a lot of indirect profits that they would have to offset.
One of Hahn’s favorite math examples relates to Germany. Every euro that goes to Poland as part of EU payments from the Federal Republic to Poland comes back to the Germans in the form of Polish orders worth 89 cents. The average profit of the EU internal market for each EU country is on average six times what it has to pay for the common household. “For the so-called net payers, it’s even more,” Hahn says.
German contribution is definitely increasing
Germany, as the largest contributor, has to finance a quarter of the budget through Brexit alone instead of a fifth so far. Depending on which negotiating position ultimately prevails, it could have to pay between ten and 22 billion euros more annually in the future.
So far, the Federal Republic has insisted that the budget should not make up more than one percent of the total economic output of the EU countries. The European Commission wants 1.11 percent, the European Parliament, which has to agree, demands 1.3 percent. On the Brussels negotiating table is now a proposal from Michel, which makes up about 1.074 percent, which corresponds to just under 1,095 billion euros. Fights down to the third decimal point are programmed, because every deviation of 0.001 percent amounts to around one billion euros.
Discounts should no longer apply
In addition, the premium discounts on the collar, from which Germany has previously benefited, as well as the “Frugal Four” Denmark, the Netherlands, Austria and Sweden. France does not, however, which is why it is drumming strongly for discounts to disappear.
These are due to the financial advantages that Britain was granted in the 1980s when the then British Prime Minister Margaret Thatcher demanded: “I want my money back”. Thereupon, among other things, Germany asked for a discount so as not to be overburdened. Since then, it has paid in less than other countries’ economic output, 0.75 percent of its gross domestic product. Italy, for example, contributes 0.83 percent.
France is also campaigning for less savings in agricultural subsidies than Michel’s compromise proposal. It knows countries like Portugal and Spain at its side, but also Poland. It will be important to sow disagreement in the camp of these countries, to separate the Eastern Europeans from the others, recommends an EU diplomat from a net contributor country. In addition, the brazen diplomatic rule for compromises should be observed: “Everyone must go out with a light blue eye.”
The formula “money for democracy” does not work
Another point of contention is the idea of using budgetary sanctions to substantiate violations of the rule of law in EU member states. Simply put: money only for real democracies. “This question is central,” emphasizes FDP man Körner. “We must not allow the rule of law to crumble in the EU as it is currently doing.” His party colleague Nicola Beer, Vice President of the European Parliament, demands: “Only those who comply with European rules can pay the full dividend anticipate money intended for him. “
But that is hardly politically or legally enforceable. In his proposal, Michel provides for a voting mode in the European Council that would make it easy for those affected to ward off sanctions. In the area around Michel it is now said that it is primarily about the budget, not the rule of law. A constitutional lawyer specializing in EU law judges: “Only a court can rule out a violation of the rule of law.”
Compromise search with fraudulent labels
So how do you fix the tricky battle situation if the current summit doesn’t work? Time is running out. If no solution is found by the end of the year, EU programs are put on hold. “If the budget is not decided soon, next year we will not be able to actually fund the new priorities with the new budget as we all imagine,” warned EU Commission President Ursula von der Leyen ,
The Eurocrats are likely to fall back on a tried and tested method: rebooking with fraudulent labeling. For example, one could find the formula for the promised increase in the EU’s Frontex border troops to 10,000 troops: initially only 5,000 to 6,000, the rest as required. Agricultural subsidies could be redeclared for contributions to the Green Deal on climate protection. The European Parliament also hopes that new sources of finance for the EU can be shot beyond the contribution payments of the member countries, such as the planned plastic tax or income from EU emissions trading.
However, the bulk of the funds will continue to come from Member States’ payments. And after the Brexit shock they are as controversial as ever. In the words of the parliamentary director of the CDU / CSU group in the European Parliament, Markus Pieper: “‘Friends of Cohesion’, ‘Economical Four’, ‘Visegrád’, ‘Neue Hanse’, ‘Agrar Süduropa’: It’s European Unworthy idea when European clubs and their heads of state draw red lines like at a bazaar. In their expectations of the EU budget, the EU states should not consider agricultural and structural money or economy as a measure of all things. The European budget is neither a self-service store nor a quarry for national financial problems. ”