The Hague and Berlin are demanding billions of dollars in cuts in EU support

In a secret proposal, Spain received cuts of up to 23.1 billion euros over the next four years. Madrid has excluded support for agriculture and poor regions, the two largest spending categories that together account for two-thirds of the EU budget. A good number of southern and eastern member states do not want any cuts because they benefit from these funds.

EU ambassadors from the Netherlands, Germany, Austria, Denmark and Sweden, among others, rejected the Spanish proposal behind closed doors on Thursday. They demanded that the entire EU budget (about 160 billion euros per year) be taken into account. The countries accused their Spanish counterpart of bias in this politically sensitive issue, and directed severe criticism because the European Union president must work honestly and impartially.

Next month, European government leaders are expected to reach an agreement on a temporary increase in the EU’s multi-year budget. The European Commission stated in June that because of all the new crises and conflicts, an additional 100 billion euros were needed for the next four years. Half of this amount is allocated to support Ukraine, and the rest is for migration and new investments and to cover the increasing interest costs of the European Recovery Fund.

Member states (except Hungary and Slovakia) can accept the additional €50 billion for Ukraine, which relates to loans (€33 billion) and subsidies (€17 billion). The necessity and financing of the remaining €50 billion is divisive among member states. The Commission’s request for a higher contribution from EU countries faces strong resistance from net contributors.

Fried cheese

Chancellor Olaf Scholz warned the Commission last month that he would not pay the bill. Now that Berlin must put its money where its mouth is after the latest ruling by the German Constitutional Court, this warning is ringing louder in Brussels.

Several countries (Sweden, Denmark) have already introduced their own austerity lists. The European Union President Spain’s proposal includes three scenarios, increasing from 8.1 billion to 13.1 billion to 23.1 billion euros, where some budget items would have to increase by 3.4 percent, 6.8 percent and 13.5 percent, respectively. The Netherlands and Germany want the cheese slicer to also be about supporting agriculture and less developed regions. This would prevent higher cuts to support funds (such as subsidies) that benefit richer countries more.

Calculate

Spain promised to submit new proposals after the ambassadors’ meeting next week. The Commission has also begun doing the math, although President Ursula von der Leyen previously claimed the budget had run out.

Reaching an agreement between leaders in December is difficult because everyone has veto power. Hungarian Prime Minister Viktor Orban said in a confidential letter to EU President Charles Michel that he believes it is too early to make a decision on additional funds for Ukraine. Orban maintains close ties with the Kremlin, and is also sparring with the Commission over more than €25 billion in EU subsidies to his country, which have been frozen due to the erosion of the rule of law in Hungary. Outgoing Prime Minister Mark Rutte also has little room to maneuver with a new lower house of parliament that is less European-oriented than the old one.