Government in line for a kicking from all sides after publishing EU budget
Irish diplomats privately remarked that if everyone ended up unhappy, they had done their job
The Government was well aware it would be in line to get a kicking from its European counterparts, and from all directions.
While the ink was still drying on the speeches Simon Harris and Jack Chambers were due to deliver in the Dáil on Tuesday, another set of officials were finalising a very different budget document.
Ireland, in its role holding the EU presidency, was preparing to propose a compromise on the size of the union’s next seven-year budget. The proposal, published on Saturday, suggested chopping €141 billion off the €1.7 trillion draft on the table.
The reduction falls short of the belt-tightening a group of fiscally conservative governments had sought. The “frugal” camp, led by Germany, wants the proposed budget to be several hundred billion euros smaller.
“The numbers that have been put on the table still present a widely unaffordable increase and we are therefore nowhere near an agreement,” said Jessica Rosencrantz, Sweden’s minister for European affairs.
For others, the compromise drafted by Irish diplomats and politicians went too far and undercut big ambitions for the EU to become a serious geopolitical player.
The bread and butter of the EU’s shared pot – Common Agricultural Policy (CAP) subsidies and “cohesion” money for infrastructure projects in poorer regions – were protected from further cuts.
Instead, Ireland suggested cutbacks to EU international development aid and to scale back a new “competitiveness fund”.
The Irish proposal, known in Brussels bureaucrat-speak as a negotiating box, is the Government’s best stab at nudging the other 26 member states towards a final, messy deal.
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There’s a rush to conclude the budget talks before the French presidential election next spring, on the (very possible) chance the Eurosceptic far-right leader Marine Le Pen is swept to power.
Leaders have set themselves a deadline to strike an agreement by the end of this year.
The budget, which will run from 2028 to 2034, is put together by the European Commission. The EU’s executive body always aims high, in the knowledge its plans will be pared back by national governments.
The EU pot is predominantly financed through national contributions. The net contributors, who chip more in than they get out, are naturally keen to keep a check on spending.
The Irish proposal expectedly reduced the amount budgeted for overseas development aid and the running costs of the EU’s institutions.
The Government also suggested trimming back the size of a bumper “competitiveness fund”. The fund will throw money behind European industry to help efforts to go green, keep pace in the tech race, channel cash into the defence sector, and fund research.
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Ironically, it is one of the few areas where the Nordic frugals, Germany and the Netherlands, do not want to slash back.
A larger group, led by Italy, Spain and Poland, which includes most southern and eastern member states, made it clear they would fiercely resist reductions in CAP money or “cohesion” funds.
“We protected to the extent the member states wished, the traditional policies of the union, which are very, very important,” Minister for European Affairs Thomas Byrne told a press conference on Saturday.
The seven-year budget needs the support of all 27 EU member states to be approved.
MEPs are unhappy at the proposed cuts, and their concerns shouldn’t be ignored. The European Parliament has to sign off on the final deal as well.
Siegfried Mureșan, one of the parliament’s budget co-negotiators, said the Irish proposal would amount to a smaller package than the existing one, which runs out in 2027, when inflation and other factors were counted in.
“We firmly reject the Irish presidency’s negotiating box ... It cuts defence as threats multiply, reduces investment in competitiveness as Europe loses ground, and leaves farmers and regions underfunded,” the centre-right Romanian politician said.
Senior Irish diplomats have privately remarked that if everyone was unhappy, their negotiating box had done its job: teeing-up the big fight to come between the 27 leaders.
