2023-10-03 21:28:42
When the European Union approved its financial framework for the 2021 to 2027 budgets and the Corona recovery fund, neither a war in Ukraine nor inflation and high interest rates were foreseeable. With this argument, the European Commission proposed an increase in the 2 trillion euro package (at current prices) by 65.8 billion euros in June. The EU Parliament is now going further: On Tuesday, the plenum voted by a large majority of 393 votes to 136 to add another 10 billion euros.
Of the total of around 76 billion euros in the surcharge, 17 billion euros should flow to Ukraine. Including 33 billion euros in loans, aid to Ukraine is expected to amount to 50 billion euros. 19 billion euros are earmarked for the higher interest payments incurred for the Corona development fund. This is largely in line with the Commission’s proposal. The funds earmarked for interest payments will in fact be excluded from the budget in the future. If interest rates continue to rise, this item could rise further automatically, without a resolution being necessary.
The European Parliament has increased funding for the consequences of migration. It increased the 15 billion euros proposed by the Commission by a further 4 billion euros. It also wants to increase the so-called flexibility instrument, a kind of reserve for unforeseen expenses, by 6 billion euros. The Commission had earmarked 3 billion euros more. An additional 1.9 billion euros proposed by the Commission have been earmarked for civil servant salaries, which have risen as a result of inflation.
“We’re not interested in golden taps”
The MPs also want to provide more money for the “Strategic Technologies for Europe Platform” (STEP). The Commission had proposed STEP instead of the much more comprehensive sovereignty fund that Italy and France had also called for in response to the USA’s Inflation Reduction Act. The Commission has earmarked 10 billion euros for this. She wants to use the money to stimulate investments by private companies, so that a total of 160 billion euros is available. Parliament is demanding 3 billion euros more for this.
“We are not interested in golden taps, but in providing the EU with adequate equipment,” said SPD MP Jens Geier. The EU must be able to respond to unforeseeable crises without financially undermining existing programs. “The Commission’s proposal to provide additional funds is absolutely right, but not sufficient,” said CDU MP Daniel Caspary.
However, Parliament cannot decide this alone. The states also have to agree. According to current planning, the unanimous decision should be made at the summit in December. The EU leaders will hardly go as far as Parliament. A group of states around Germany are so far only willing to finance aid for Ukraine. This should also happen outside the budget, if possible, without involving Parliament.
There is no threat of a “lockdown” like in the USA
This threatens a conflict between the two EU institutions. It starts with the schedule. The European Parliament is pushing for an agreement before the end of the year. But that is virtually impossible if the states only decide on their position at the December summit shortly before Christmas. Green MEP Rasmus Andresen accused the states of delaying the agreement. He called for a special summit to reach a quick agreement.
The European Parliament argues that some of the additional money has already been planned for in the 2024 budget. In short: Without an increase in the financial framework for 2021 to 2027, the 2024 budget cannot be passed in the foreseen form. It would be possible to pass it without an increase and then pass a supplementary budget in January or February. But large parts of parliament don’t want that, also in order to build pressure.
Werner Mussler, Santiago de Compostela Published/Updated: , Recommendations: 4 Hendrik Kafsack, Brussels Published/Updated: , Recommendations: 4 Hendrik Kafsack and Karl De Meyer Published/Updated: , Recommendations: 8
Unlike in the United States, the EU will not face a “lockdown” at the beginning of January if there is no 2024 budget. However, the funds would be frozen at the previous year’s level and would only be paid out month by month.
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