A $1.2 Trillion Valentine's Day Proposal Sets Stage for EU Clash




  • In World
  • 2020-02-14 15:02:28Z
  • By Bloomberg

(Bloomberg) -- European Union governments were presented on Friday with a compromise over the bloc's budget for the next seven years, which is unlikely to satisfy any of the warring camps and sets the stage for a clash between poorer and richer member states on Feb. 20.

EU Council President Charles Michel proposed that governments commit 1.095 trillion euros ($1.2 trillion) to a joint pot for the period between 2021 and 2027, which corresponds to 1.074% of the bloc's annual economic output. Michel will chair an emergency meeting of EU leaders on Thursday amid demands by richer governments for a lower cap. Poorer countries are likely to see the figure as insufficient.

The budget is a cornerstone of EU policy that lets farmers compete against imports from the developing world, helps poorer states catch up with the rich ones and underpins projects that bind the union together. But agreeing on the amount of cash and how to spend it is a regular source of tension between the net contributors and those who get more than they put in.

Just minutes after the compromise was circulated in Brussels, diplomats from both groups said they were unhappy about it and said that a deal at the upcoming summit is unlikely as a lot of work is still needed to bring positions closer together.

Earlier on Friday, Spiegel magazine reported that German Chancellor Angela Merkel would be willing to increase her country's contribution to the EU budget to more than 1% of gross domestic product if the other member states agree to set new financial priorities. In return, Merkel wants the EU to spend less money on agriculture and instead invest in projects that benefit all countries, the magazine said without citing the source of the information.

Conditionality Clause

Michel's compromise proposal ties disbursements to respect of the rule of law, a key request by several richer nations concerned about sliding democratic standards in countries such as Poland and Hungary. Any financial penalty, however, would need the support of a super-majority of member states, according to the draft seen by Bloomberg -- a clause that is likely to satisfy Warsaw and Budapest.

The previous proposal was much stricter, requiring a super-majority of member states to block -- as opposed to approve -- penalties imposed by the EU's executive arm on rule-of-law grounds. The new wording on the rule of law is likely to draw sharp criticism from countries who argued for such conditionality and see the compromise as watered-down.

A separate budget for euro-area member states is set at 12.9 billion euros, with an additional 5.5 billion euros earmarked for poorer members of the currency bloc and another 767 million euros to support reforms. The total amount -- to be spread among 19 eurozone countries over seven years -- falls far short of the ambitious plans that French President Emmanuel Macron had envisaged.

(Updates with Merkel comments in the fourth paragraph)

--With assistance from Ian Wishart and Viktoria Dendrinou.

To contact the reporter on this story: Nikos Chrysoloras in Brussels at nchrysoloras@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Richard Bravo, Nikos Chrysoloras

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.

COMMENTS

More Related News

Bernie Sanders Boycotts Pro-Israel Americans
Bernie Sanders Boycotts Pro-Israel Americans
  • World
  • 2020-02-26 16:14:04Z

(Bloomberg Opinion) -- With Bernie Sanders emerging as the front-runner to win his party's nomination, pro-Israel Americans must grapple with an uncomfortable question: Does the Democratic party still support the world's only Jewish state?  What raises the question is next week's annual conference of the American Israel Public Affairs Committee, or AIPAC. Sanders announced this week that he would not be attending, saying on Twitter: "I remain concerned about the platform AIPAC provides for leaders who express bigotry and oppose basic Palestinian rights."At Tuesday night's debate, Sanders clarified that he was speaking about Prime Minister Benjamin Netanyahu. "I'm very proud of being...

Ford COO Sees 2009 Crisis Flashback on Faces of Colleagues
Ford COO Sees 2009 Crisis Flashback on Faces of Colleagues

(Bloomberg) -- Ford Motor Co.'s recently appointed chief operating officer sees the struggling automaker operating with the same sense of urgency and crisis that kept the company out of bankruptcy a decade ago."Everyone at Ford knows the situation we're in," Jim Farley, who becomes COO on March 1, said Wednesday at a Wolfe Research conference in New York. "I can see it on the faces of my colleagues and it takes me back to about 10 years ago. I've seen the look before."Ford lost $14.8 billion in 2008, the most in its 105-year history, but was the only automaker in Detroit to avoid the bailouts and bankruptcies that befell General Motors and Chrysler a year later. The tables have turned...

Trump Says No Country Has Helped Him Win Elections, Slams Schiff
Trump Says No Country Has Helped Him Win Elections, Slams Schiff

(Bloomberg) -- President Donald Trump said he doesn't want help from any country to win re-election and accused House Intelligence Chairman Adam Schiff of leaking news that U.S. authorities believe Russia is trying to help Bernie Sanders win the Democratic nomination."I don't want help from any country," Trump said at a news conference in New Delhi on Tuesday, concluding a two-day trip to India. "And I haven't been given help from any country."The remarks suggested that the president still disputes official U.S. conclusions that Russia interfered in the 2016 election to help secure his election. In June, he said in an interview with ABC News that he would at least listen to foreigners who...

Bloomberg
Bloomberg's girlfriend, Diana Taylor, on concerns over NDAs: 'Get over it'

"Life has changed. I grew up in that world. It was a bro culture," Taylor said.

U.S. Stock Futures Slide as Virus Concern Grows: Markets Wrap
U.S. Stock Futures Slide as Virus Concern Grows: Markets Wrap

(Bloomberg) -- U.S. equity futures sank with Asian shares and gold surged after the number of coronavirus cases outside of China increased and concern grew that global economic growth could take a more sustained hit.S&P 500 Index futures fell about 1.3%, with shares in Seoul and Sydney also lower. Australian bonds climbed with Treasury futures. Over the weekend, finance chiefs and central bankers from the world's largest economies said they see downside risks to the global economy persisting as supply chains get disrupted from the deadly virus. The Australian dollar retreated along with the offshore yuan. Crude oil tumbled more than 2%. Japan is shut for a holiday.Investor sentiment is...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: World