EU leaders expect budget disputes to simmer all
summer
Among the many disagreements for leaders’ summit: how
big a budget and when exactly does summer end?
By DAVID M.
HERSZENHORN, LILI BAYER, JACOPO BARIGAZZI, HANS VON DER BURCHARD AND MAÏA DE LA
BAUME 6/18/20, 6:36 PM CET Updated 6/19/20, 4:44 AM CET
EU leaders
are still so far apart on a long-term budget deal that agreeing where they
disagree most on Friday will count as a win at their videoconference
get-together.
Capitals
are at least aligned on the necessity for a deal before the end of the summer,
but such is the scale of divergence on the substance of the financial plan that
even a consensus on precisely when that seasonal milestone falls is potentially
something to argue about.
In short,
expectations for the high stakes "summit" on Friday could not be
lower.
In a speech
to the Bundestag Thursday, German Chancellor Angela Merkel said the virtual
gathering would at best provide for an "initial exchange" of
positions on a plan that has been drastically scaled up in response to the
economic impact of the coronavirus crisis.
Council President
Charles Michel, who will preside over the negotiations, has made clear that he
expects heads of state and government to use the meeting to reiterate
longstanding positions. Those include what senior officials say are
"fundamental difficulties" among the so-called Frugal Four countries
with the signature item in the recovery package: a scheme to raise €750 billion
from financial markets for a mix of grants and loans to help regions and
sectors hit by the COVID-19 crisis. The frugals — Austria, Denmark, Sweden and
the Netherlands — staunchly oppose the "loans for grants" concept, as
well as the prospect of taking on a colossal joint debt.
Then there
is the potential debate, only half-facetious, over how to define the end of
summer — a matter of debate that might yet help Michel claim a victory.
But the
€500 billion grants program is just one in a long list of hotly disputed
points, including such basic matters as the overall size of the budget. The
Commission has now proposed €1.1 trillion, which Copenhagen, Stockholm and some
other capitals have already rejected as too high, noting that they opposed a
€1.09 trillion plan considered in February at a previous attempt by leaders to
reach a consensus.
The
Commission plan, which fused the traditional Multiannual Financial Framework
(MFF) to the €750 billion Recovery Instrument, has now added an array of new
clashes, not only over the mix of grants and loans, but on the precise formulas
for allocating recovery money and potential conditions to be attached to any
grants. Critics of the plan are even questioning its legality.
Countries
hard-hit by the crisis, like Italy and Spain, insist that the grants are an
essential show of solidarity by the EU, and senior EU officials say that the
majority of the 27 EU countries favor the "global architecture" of
the Commission plan. But on the MFF, a majority is not nearly enough. The
decision must be unanimous and national legislatures must also give their
blessing to the Commission's new borrowing.
The
three-week run-up to the summit since the Commission's unveiling of its plan
has been marked by two obvious contradictions: senior officials and diplomats
all insist that it is urgent to reach a swift agreement — ideally in July — but
countries with the most hardline positions show little willingness to budge.
Then there is the potential debate, only
half-facetious, over how to define the end of summer — a matter of debate that
might yet help Michel claim a victory.
"The
best would be to have an agreement by the end of the summer," a senior
official closely aware of Michel's thinking said. "And it's right that
even about the summer, we don't have in each member state the same
interpretation. In Nordic countries, for example, it's not the same timing and
it gives some margin of maneuver."
As usual, Merkel has no patience for such trifles.
"The best thing would be if we could reach an agreement before the summer
recess," she said in her Bundestag speech Thursday, clearly referring to
the end of July, when most civil servants in Brussels and Berlin ritually leave
on holiday.
"Then
we would be able to negotiate with the European Parliament during our Council
presidency and the national parliaments would have time to ratify the own
resources decision before the end of the year," she added, referring to
national signoffs for the Commission to borrow on financial markets.
But while
Merkel's timeline would enable the EU to have the new budget in place by the
time the current MFF expires on December 31, it also looks heroically optimistic.
Senior
Council officials made clear Wednesday that in Michel's initial consultations,
with individual and small groups of EU leaders, he has heard zero agreement on
the proposal to increase own resources — a step that from the perspective of
national capitals is crucial to repay money borrowed for the Recovery
Instrument.
As of now,
many leaders have only expressed willingness to consider proposals that have
already been on the table, such as revenues stemming from the EU Emissions
Trading System and non-recycled plastic packaging waste in each member country.
And while some governments have welcomed Commission proposals for a new a
carbon border tax, a digital tax and a tax on large corporate entities, others
have pointed out that they lack details and could only be seriously negotiated
in the coming years.
Asked on
Thursday what issues about the Recovery Instrument alone remained open for
debate, one German official seemed not to know where to stop the list.
"The
volume is open; the question of discounts is open; the question of award and
allocation criteria is open," the official said. "Furthermore ... the
terms of the repayments are open. So there are a large number of open
questions, but not all of them are equally important politically."
The
official also acknowledged there was widespread criticism of the proposed
formulas for distributing recovery money: "The Commission has an objective
problem, which is criticized by many, but no one has a proper solution."
While no
breakthrough is expected at Friday's summit, senior officials said that Michel
was hoping leaders could set parameters that at the very least would lay a path
to an eventual agreement. The Commission's proposal included so many new
elements, they said, that leaders must first lay out how they each interpreted
those provisions, and potentially challenge each other's views. That would then
allow them to at least agree on where they disagree most, thus giving Michel a
steer on how best to frame the next round of negotiations.
These
officials also said that the Council president sees a real risk that the Frugal
Four, who each contribute more to the bloc's budget than they get back, will
persuade other EU countries to join them in opposing core aspects of the
proposal.
"The
first priority," a senior official said, "is also to avoid that other
member states would have a big opposition with the global proposal, this idea
that the MFF and recovery fund, it's a package, this idea that we will use
loans for grants."
And while
Michel, Merkel and other leaders have pushed for a quick deal, they all seem
resigned to the idea that the hard negotiating yards cannot be done over
videoconference. That leaves Friday's summit as a warm-up for the start of
actual face to face negotiations in Brussels — possibly in the second week of
July.
Still, one
diplomat said Friday's initial discussions could prove useful.
Across Brussels, as diplomats held forth at the usual
avalanche of pre-summit briefings, the desire for a quick deal was a consistent
message.
“The hard
negotiation is before us, but the sniffing out is also very important,” the
diplomat said, noting that this is a time negotiators use to scope out
positions and to identify and secure allies.
Across
Brussels, as diplomats held forth at the usual avalanche of pre-summit
briefings, the desire for a quick deal was a consistent message.
"We're
quite under some time pressure," a second diplomat said.
A third
diplomat said, "I don’t expect any shift of positions but leaders
understand it’s time to advance." This second diplomat added,
"Without a deal in six weeks economically we would not have the resources
we need and politically it could become
even more complicated."
A fourth
diplomat said even modest progress on Friday would be an advance: “If the
leaders will leave the room saying that only they have restated their lines,
but they have also listened to the others and have the ambition to reach a deal
by the end of summer, than I’m happy."
The first
diplomat said the aim was a "full political agreement on the main
elements" by the end of July. "How exactly we shall get there, that
is of course the one-million dollar question."
Actually,
the trillion-euro question, but who's counting? Oh, everyone.
Sem comentários:
Enviar um comentário