The Irish Presidency of the Council is proposing cuts of about €159 billion, or 8%, compared with the Commission’s initial proposal for the 2028-2034 Multiannual Financial Framework (MFF). The reductions are set out in a new negotiating text circulated among member states today and made public.
The cut is about four times greater than that in the Cypriot negotiating framework presented by the Cypriot Presidency last June. That text reduced the Commission’s proposal by about 2%, equivalent to €37 billion in current prices. Compared with the Cypriot text, the new proposal includes a further €122 billion in cuts.
Total commitments stand at €1.825 trillion in current prices, compared with €1.985 trillion in the Commission’s proposal and €1.948 trillion in the Cypriot text. Unlike the Cypriot proposal, which distributed the burden roughly equally between competitiveness and external action, with cuts of about 4% in each area, and left the National and Regional Partnership Plans (NRPPs) for agricultural policy and cohesion almost untouched, the Irish text concentrates cuts in three areas: €75 billion from competitiveness (−12.8%), €37 billion from Global Europe (−17.4%) and €10 billion from administrative spending (−8.8%). NRPPs are reduced by about €28 billion (3%), while the EU Facility cushion, which allowed the Commission to address unforeseen crises during the seven-year period, is abolished.
Irish Minister for European Affairs Thomas Byrne, who presented the revised negotiating framework, said it was “the product of intensive consultations with member states and EU institutions over the past three months”.
Mr Byrne noted that the text “builds on the work of the Cypriot and Danish Presidencies”. He said the Irish Presidency had approached the process as an “honest broker”, seeking to bridge differences between member states and bring the EU closer to resolving its “budgetary dilemma”. The effort to bridge the gap is between the “frugal” countries, led by Germany, which are calling for cuts of hundreds of billions, and the 17 “Friends of Cohesion”, which oppose reductions to the Union’s traditional policies.
As Mr Byrne acknowledged, finding a way to fund new priorities in competitiveness, research, innovation, security and defence without neglecting core policies, while taking each member state’s budgetary capacity into account, is not easy.
“We know that a proposal at this stage of the process will never satisfy all the demands of all sides, and that we still have a way to go,” he stressed. He added that the framework aims to act as a “catalyst to accelerate the process towards its conclusion, guided by the interests of European citizens”.
“We hope that the negotiating framework will focus discussions on the areas where further compromises are needed,” he concluded.
On own resources, the Irish Presidency made no significant changes to the package of five new own resources proposed by the Commission last year, which is estimated to generate €55 billion annually. It did, however, propose technical adjustments, including a gradual introduction of the contribution from the Emissions Trading System (ETS) for poorer countries and an increase in the contribution from the Carbon Border Adjustment Mechanism (CBAM). The Irish Presidency rejected the European Parliament’s proposed tax package covering digital giants, online gambling and cryptocurrencies.
“We have made two important changes. First, we propose increasing the call rate for the new own resource based on CBAM from 75% to 90%. This reflects our assessment of the best way to strengthen the proposed package, in line with member states’ preferences,” the Irish Minister said. He also noted that the clear concerns of many member states most affected by the ETS had been taken into account.
“We propose a gradual approach to implementation. Over the seven-year cycle, this approach will address member states’ concerns about the proposal’s retroactive effects,” he stressed. “Our aim is for this adjustment to strengthen the case for an own resource derived from the ETS that will be acceptable to all member states,” he added.
The text provides for a review clause for the MFF in the event of Cyprus’s reunification. It allocates €438 million in current prices to support the Turkish Cypriot community, an amount unchanged from the Commission’s proposal.
The 27 Permanent Representatives will discuss the text at a meeting tomorrow, Sunday morning, and prepare for leaders’ discussions at the Summit on Thursday and Friday, 15-16 October.
Source: CNA
