EU budget stalemate: what happens next?

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By Maria Psara
EU budget stalemate: what happens next?
Copyright  EBS

Following EU tradition, the first European Council on the long-term budget (or MFF) was a failure.

After more than 27 hours of talks, EU countries agreed to disagree and decided that they need more time to hammer out a deal.

Now what? Summit or no summit?

"For sure there will be a new summit in the coming months," says Marta Pilati, policy analyst at the European Policy Center. "It is not clear whether it will be at the regular summit in March or whether it will be an extraordinary summit. They might agree on that occasion but there is a little chance. If they don't then there will be other summits or just one in the coming months towards the second half of the year."

What is likely to get the chop?

Big differences remain between the “Frugal Four” (the Netherlands, Austria, Denmark and Sweden) who don't want to spend more than 1% of GNI and the group of 17 countries opposing the cuts to the Common Agricultural Policy and Cohesion (funding which aims to reduce inequality between member states).

At the end of the summit, the Commission came with a new technical document, (containing a ceiling of 1.069% or 1.07% of GNI,) trying to bridge the gaps.

"The tension is of course between reducing the whole size of the budget and maintaining existing policies at the current level of spending," explains Pilati. "The likely results of these two tensions is that new priorities, those that EU Commission proposed a larger budget, will be cut. Which is what we have seen. So reduced budget for research, innovation, defence, migration and policy areas like this."

What about Brexit?

One question which hangs over talks is whether these changes would influence the trade negotiations between the UK and the EU that will start soon.

"I think the UK can play a bit to worsen the image of the EU by showing the disunity at the MFF but I don't think in practice that will have an effect on the trade deal negotiations," Pilati maintains.