Dispute over the EU budget: “More Europe won’t come from more money”

A gap of several hundred billion

The positions of the EU institutions in Brussels and those of most EU member states are hundreds of billions apart. This spring, the EU Commission presented its first proposal for the MFF (“Multiannual Financial Framework”), the official EU abbreviation for the budget. It amounts to around two trillion euros. A significant increase compared to the current seven-year budget, which is around 1.2 million. According to Brussels’ plans, the additional money should be spent primarily on the major new tasks that the EU has set for itself: common security and defense and economic competitiveness. Specifically, hundreds of billions should flow into joint armaments projects, the expansion of raw material extraction or into server farms for artificial intelligence. The EU Parliament, traditionally the advocate of generous EU budgets, is still around 200 billion above the Commission’s proposal.

“Unacceptable” for net payers

For many EU member states, especially the so-called “net payers” such as Germany or Austria, these proposals are “unacceptable” anyway. Merz and Stocker have imposed austerity budgets at home and for that reason alone cannot imagine a generous increase in the EU budget. Stocker: “I cannot and do not want to explain to the people in Austria that the largest budget of all time is being discussed in Brussels. while at home we have to tighten our budget belts.”

Concern for agriculture and regions

Not only the increase in the budget is causing anger in Austria, but also its planned completely new structure. The Support for agriculture and for economically backward regions, traditionally the largest items in the EU budget, should be combined in one budget item in the future, including significant cuts. Agriculture has a fixed share in this, but the subsidies for mountain farmers or organic farming, which are so important for Austria, could very quickly be lost. The regions’ fears are very similar. Until now, they were able to negotiate funding for projects directly with Brussels, but now the capitals are supposed to intervene – and that doesn’t suit the Austrian federal states either.

Group formation all over the place

In the budget dispute, group formation has already begun among the EU states. There are the countries in the south, like Italy, that are in favor of expanding the budget because they benefit most from it. Among net contributors, there are those who are pushing for significant cuts to the current proposal, but who are in full agreement with the new goals – i.e. the economy and defense – such as the Dutch. Austria, which is committed to agriculture and regions and since it absolutely wants to maintain the current schemes, it is more likely to find like-minded people among the countries with strong agriculture, such as Romania or Finland.

Own revenue for the EU

While the EU states are forging their alliances of convenience, the EU Commission is trying to alleviate concerns about significantly higher payments into the EU budget. They are relying on fresh money for the EU budget from Brussels’ own revenues. Numerous ideas are circulating, from Taxes for the digital giants from the USA such as Meta or Google through to levies on electronic waste or cigarettes. The latter, however, are reliable sources of income for the member states that do not want to let them be taken away. So there is plenty of material for further debates. Whether this will actually lead to a compromise at the end of this year, as Brussels is considering, currently seems very questionable. It was also learned on the sidelines of the meeting in Berlin that we are only at the beginning of the debate and there is Brussels, but also the states among themselves, “still far too far away”.