Tensions Flare Over Next EU Budget     10/14 06:18

   

   BRUSSELS (AP) -- Political tensions mounted Tuesday over the European 
Union's next long-term budget as pressure builds to get the spending package 
agreed before a series of unpredictable elections in some of the biggest member 
countries next year.

   The EU budget, known as the multiannual financial framework, amounts to 
around 1.2% of the 27-nation bloc's gross national income. The MFF is financed 
mostly by the member countries based on the size of their economies.

   The spending plan is the cash point where EU ambitions, conflicting policy 
priorities and economic realities collide and must be endorsed by all member 
countries and the European Parliament.

   The 2028-2034 budget is being negotiated as the EU faces outside challenges 
including supporting Ukraine as it fights off the Russian invasion and 
remaining competitive in the face of high energy prices and trade tensions with 
the United States and China.

   Inside the union, elections in France, Italy, Poland and Spain later this 
year and next year could test the resilience of the world's biggest trading 
bloc, with the hard right leading in opinion polls in France and results in 
Poland and Spain difficult to predict.

   The EU presidency tables a new proposal 

   Over the weekend, Ireland, which holds the EU's rotating presidency, 
proposed to set the budget at 1.62 trillion euros ($1.81 trillion). That is a 
30% increase over the current seven-year package, but 8% less than what the 
European Commission wants.

   Sweden, one of about eight countries known as net contributors paying more 
into the budget than they receive back in allocations, insists "several hundred 
billion euros" more in cuts are needed.

   "It's wildly unaffordable, and the volume must go down," Sweden's EU Affairs 
Minister Jessica Rosencrantz said as she and her counterparts met to chew over 
the Irish presidency proposal ahead of an EU leadership summit later this week.

   The Irish plan would mean "a 60% increase in the Swedish contribution" that 
amounts to "a fee for the Swedish taxpayers to pick up, which limits us to make 
the necessary priorities back home," Rosencrantz said.

   On Sunday, Chancellor Friedrich Merz of Germany, Europe's biggest economy 
and a major net budget contributor, welcomed Ireland's "tireless efforts" but 
said "we are still a long way from reaching an agreement."

   "The EU budget must be affordable for those who bear the main burden of 
financing," said Merz, who will from Thursday join his counterparts in Brussels 
for two days of talks. "Everyone must contribute to the necessary adjustments."

   Something has to give or money must be found elsewhere 

   That "everyone" was a reference to countries rejecting cuts to cohesion 
funds for Europe's poorer regions, or to agriculture policy, which subsidizes 
the continent's farmers. Combined, this money accounts for about two-thirds of 
the budget.

   Ultimately, if countries aren't willing to stump up more cash, then either 
farm or cohesion spending must shrink or Europe's ambitions on defense, 
competitiveness and other priorities scaled back. Unless money can be found 
elsewhere.

   Despite the uncertainty, Ireland's EU Affairs Minister Thomas Byrne thinks 
the presidency has laid a good foundation for negotiations in the days and 
weeks ahead.

   "That was our task, to find that basis," he told reporters in Luxembourg 
before chairing Tuesday's meeting. "We weren't asked to find a basis for 
agreement. That will come later."

   Indeed, most of the parties involved are complaining more or less equally 
and none of them have yet walked away, which may be a good sign.

   "Nobody's going to get everything that they want. But we hope that there'll 
be something there for everybody," Byrne said.

   Desperately seeking Europe's 'own resources' 

   Still, the negotiations are gathering pace just as ambitions for the EU in 
an uncertain world are on the rise but room for fiscal maneuver in many 
countries is disappearing.

   The MFF is tiny compared with national budgets, but France, Italy and 
Belgium are mired in debt and oppose paying more.

   As a bloc, the EU is not allowed to levy taxes, but does earn revenue from 
mechanisms such as customs duties and value added tax. The commission is 
looking for new ways to raise its "own resources" through the carbon emissions 
trading system and a new tobacco duty, among other measures.

   Whatever happens, missing the end of December "deadline" does not mean that 
money runs out. Nations have another year, but much time is needed to adopt 
legislation on spending programs and approve it all so money can be flowing by 
January 2028.

   In a letter inviting leaders to the summit, European Council President 
Antnio Costa said clinching a "timely agreement" is "essential to provide our 
economies with the predictability and stability they need in an unstable and 
unpredictable world."

   "I count on your leadership and collaborative spirit," Costa wrote.