Swedish Prime Minister Stefan Lofven, right, is greeted by European Council President Charles Michel prior to a bilateral meeting at an EU summit in Brussels, Thursday, Feb. 20, 2020. After almost two years of sparring, the EU will be discussing the bloc's budget to work out Europe's spending plans for the next seven years. (Virginia Mayo, Pool)

1 trillion euros: worth a big, long fight at the EU summit

February 20, 2020 - 6:41 am

BRUSSELS (AP) — Everything is set for the EU's bruising trillion-euro summit.

Leaders from the European Union's 27countries were hobnobbing in Brussels on Thursday to discuss the bloc's spending plan for the next seven years now that Britain has left.

Diplomats and number crunchers have been working on the budget for years but the issues are so divisive that the leaders' summit might last into Saturday and still end without a result.

“There are lot of concerns, priorities, and interests," said EU Council President Charles Michel when he arrived hours early for the summit. “I’m well aware that the final steps that must be taken to find a compromise are always the most difficult.”

The leaders of Austria and Denmark were also early in the urn-shaped Europa building, seeking to make their case for frugal spending and a leaner bloc.

The EU nations need to regroup after Britain's departure three weeks ago, and a show of unity on their common budget could help in that regard. Forget it.

Britain's exit means the loss of up to 75 billions euros ($81 billion) in net contributions to the budget, and how to make up for that is causing friction. Leaders of rich nations don't want to have to pay more into that common EU pot, and those from poorer member states are angry at the prospect of receiving less money from the EU.

Even if a trillion euros ($1.1 trillion) sounds like a lot, it actually amounts to about 1% of the gross national income of the 27 nations combined. The debate is over some 0.3 percentage points.

Even German Chancellor Angela Merkel, who is usually cautious in her remarks, said bluntly that for her country, the EU's biggest economy, “in many places our concerns have not yet been sufficiently taken into account."

It’s not just about convincing reluctant member countries to stump up funds. The European Parliament must also ratify any final budget agreement and the EU lawmakers are not happy.

“At the moment, we remain 230 billion euros ($248 billion) apart," European Parliament President David Sassoli said this week.

After a series of one-to-one meetings with national leaders in recent weeks, with some lasting three hours, European Council President Charles Michel proposed last Friday to set the budget at 1.074% of EU gross national income. The parliament wants 1.3%, while the EU’s powerful executive arm, the European Commission, prefers 1.11%.

Ahead of the negotiations, the 27 member nations are roughly divided into two main camps. The so-called “Frugal Four” of Austria, Denmark, the Netherlands and Sweden versus the “Friends of Cohesion,” a group of mainly central and eastern European nations who want to see the continued flow of “cohesion funds,” money earmarked to help develop poorer regions.

Ahead of the summit, the frugal four, who would like the budget to drop to as low as 1% of gross national income, rejected Michel’s offer in a Financial Times newspaper op-ed, saying that in light of Brexit “we simply have to cut our coat according to our cloth.”

Complicating things further is the level of global uncertainty beyond the continent. While climate change was largely a technical matter during the last budget negotiations seven years ago, this time the EU is planning to spend a quarter of its budget on green issues.

Add that to the many other, varied issues the budget will cover - like agriculture, education and transport - and it makes for a difficult summit.

Outside the summit center, farmers were already rolling in tractors in the street to push their demands for sufficient funds.


Lorne Cook contributed to this report.

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