EU Budget faces €110bn top up by Parliament

The European Parliament has requested an increase to the EU's seven-year budget with around €110 billion in funding and legally-binding commitments on the introduction of new levies to help finance the bloc's €750 billion stimulus in the fight against coronavirus.

The announcement was made on Monday after MEPs held intense discussions concerning the long-term budgetary plans for the EU with the Council of Ministers, which represents the 27 member states.

Known as the multi-annual financial framework (MFF), the budget discussions focus solely on post-pandemic recovery following the potential of an economic crisis in the wake of the coronavirus outbreak.

The negotiator's main objective is getting the stimulus money flowing by 1 January, with sources stating the discussions were "quite intensive."

The two sides discussed topping up the €1.074 trillion MFF and the governance of the Recovery and Resilience Facility, the main pillar of the €750 billion recovery find, which were both announced as part of the €1.8 trillion deal announced back in July.

Also on the table were discussions about green energy deals, with a commitment by EU leaders that 30% of the bloc's funds are to be allocated to climate-friendly projects.

A primary point of contention for the negotiators is the Parliament's request to finance areas like the Erasmus education program or Horizon Europe, the EU's innovation and research programme.

Parliament sources estimate their demands amount to around €110 billion.

A council official said that their room for manoeuvre was very limited.

Many representatives from the various member states believe the Parliament's demand is hard to swallow, especially given the ready funds available for the deal in the EU's coffers.

Another outstanding issue is on the subject of the €750 billion corona stimulus package. Ministers are wondering how the stimulus will be paid for, despite Parliament's pushing for legally-binding declarations by member states on the introduction of levies and taxes to fund it.

However, a council official said it was "a big ask" to request a legal commitment with no formal proposals on the table.

Referring to the lack of clarity on the carbon border tax project, or an expanded Emission Trading System, the Council official said: "You wouldn't buy a car you haven't seen."

Member states are instead exploring ways of beefing up the wording used by EU leaders back in their July agreement, which included a timetable for new levies.

EU sources have said an agreement would be easier to find on the governance of the recovery fund, with experts from both sides attempting to find a formula to give Parliament a bigger say in the discussions.

Back to Homepage

Back to Politics & Economics