Commission Rejects Council Budget Box on EU Spending Plans

The European Commission said in Luxembourg that it does not accept the Council’s revised negotiating box for the next long-term EU budget, with Commissioner Serafin saying the proposal is too small for the needs the Union has set for itself. He said the Commission is unhappy with the outcome and that the discussion comes at a time when the EU faces Russia’s aggression against Ukraine, tensions in transatlantic relations and intensifying trade disputes.

Serafin also pushed back on criticism of the Irish presidency, saying that in his view it was unfounded and unjustified. He said the presidency had listened to all members and had reflected the current state of play in the negotiations.

On the numbers, he said the budget agreed in December 2020 amounted to around 1.13% of EU gross national income, with EUR 750 billion of NextGenerationEU added on top. By contrast, he said the current discussion is about a budget at around 1.02% of EU GNI in investments, excluding NextGenerationEU repayments, or 0.11 percentage points less than the 2020 deal as a share of the economy.

He added a simple comparison for scale: the EU budget is equivalent to about four days of economic output, which he said means it is covered by around January 4. Under the Commission proposal for the next multiannual financial framework, he said that rises to roughly four and a half days, so the budget would be covered by lunchtime on January 5.

Serafin said the proposed cuts to cushions, reserves and margins would leave the EU less able to deal with unforeseen developments. He also said investments in competitiveness, connectivity and security still need to happen, but that the revised box makes it more likely they would be fragmented and uncoordinated, which he said would mean higher bills for taxpayers overall.

He welcomed the fact that the package of new own resources remains on the table and said the leaders can now decide on a balanced and ambitious package. On administrative spending, he said the cuts proposed by the presidency jeopardise the Commission’s ability to equip its institutions properly for existing and new tasks.