EU Parliament fails to approve the budget
The Recovery Package is a historic step, but the budget cuts are unacceptable.
UM – 08/2020
Despite the apparent, intense struggle of
the Member States to reach a compromise on the recovery package and the budget
for the period 2021 to 2027, MEPs refused to give their approval to the
multi-year budget of the European Union in the last session preceding the
summer break. The massive reduction in subsidies would result in the budget
from 2024 onwards being below the level of 2020. This puts the implementation
of EU commitments and priorities at risk.
Parliament will not accept a fait accompli
Important key programmes such as those on
climate protection, digital change and health face the risk of underfunding
next year. The European Parliament said that this is particularly dangerous for
health and research programmes at these times of a global pandemic. On the
contrary, targeted increases would be needed for a whole range of programmes,
as well as for the relevant EU agencies and the European Prosecution Service.
Therefore, a satisfactory compromise must be reached between the European
Council and the Parliament. In the end, the Council conclusions represented no
more than a political agreement by the Heads of State and Government.
Reduction of grants in the Recovery Package undesirable
In its resolution of 23 July, the European
Parliament expressly welcomed the Recovery Package of EUR 750 billion as part
of the next generation EU reconstruction aid. However, the reduction of non-repayable
grants to EUR 390 billion would be regrettable.
A plastic tax is not enough
Moreover, the problem of counter-financing
has not been solved. This would require addition of more internal resources to
the budget. Parliament would not accept solutions without reforming the Union's
own resources system, which should also include a range of new internal
resources. The plastic tax, which has been reopened for discussion, would only
be a first small step towards meeting Parliament's expectations.
Negotiations between the European Council
and the Parliament will start this September. A compromise must then be
ratified in the Member States, which should be done by the end of this year.
The deadline is ambitious. Should the new budget not be adopted in time,
Article 312 (4) of the Treaty on the Functioning of the European Union (TFEU)
provides for a temporary extension of the limit and other previous-year
provisions of the former financial framework, pending the adoption of the new