The European Council is taking place amid a particularly tense atmosphere, with disagreements over the European Union’s next long-term budget.
At the same time, while the discussion on energy costs took place in a more constructive atmosphere, there are still some disagreements.
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Warnings that an agreement may not be reached by the end of the year, pressure for significant cuts to the EU budget, and the leaders’ inability to reach a common position on energy reflect the difficult environment in which the EuropeanE.
In this context, European Parliament President Roberta Metsola launched “criticism” at European leaders, stressing that Europe cannot agree on ambitious goals and then cut back on the resources needed to achieve them: “We cannot agree and then cut back,” she said pointedly.
Budget: Cuts of up to 11% on the table
At the center of the discussions is the European Union’s next long-term budget, with disagreements among member states concerning both its total size and the likelihood of reaching an agreement by the end of the year.
Negotiations are centered on the Irish presidency’s proposal for cuts totaling 141 billion euros. The cuts mainly affect funding for research, technology, climate action, security, and foreign policy, while funding for agriculture and cohesion policy is expected to remain largely unchanged.
At the same time, a senior German official expressed doubts about the possibility of holding an extraordinary summit of European leaders in late November. The summit had been planned with the sole aim of advancing budget negotiations.
“As far as we know, it is not yet entirely certain that an extraordinary meeting of the European Council will take place in November,” the official said, adding that if the meeting does not ultimately take place, it would be a sign that reaching an agreement by the end of the year is becoming less likely.
The so-called “frugal” countries—Austria, Denmark, Germany, Finland, the Netherlands, and Sweden, are calling for even deeper cuts, to be applied across the board to various budget sectors.
“It’s a no-go zone,” Sweden’s prime minister said Thursday morning, emphasizing his country’s opposition to some of the proposed spending measures.
In contrast, the 17 countries that make up the “Friends of Cohesion” group— Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, and Spain, oppose such a large cut in funding, as they seek to protect funding for cohesion policy.
“This is unacceptable,” the Spanish prime minister stated emphatically.
Disagreements between the two sides remain intense, calling into question the goal of reaching a unanimous agreement by December. However, a Council official appeared more cautious about the possibility of canceling the extraordinary session, leaving open the possibility that it will take place as scheduled.
For his part, the President of the Republic of Cyprus, Nikos Christodoulides, estimated that the final budget could be approximately 10% to 11% smaller than the European Commission’s proposal, which is close to 2 trillion euros.
In an interview with Politico on the sidelines of the summit, the President noted that the cuts could reach a double-digit percentage.
Disagreements on Energy as Well
The first round of discussions among European leaders on energy prices also concluded without an agreement, with Germany and certain countries that share its views submitting a compromise proposal on the Emissions Trading System (ETS).
A senior German official warned that a further postponement of the issue cannot be accepted.
“We cannot accept a postponement of the ETS,” he stated, adding that it is likely no conclusions on the matter will be reached at this meeting. As he clarified, such an outcome would be acceptable to the German side, since, according to him, it is other countries that are pushing for conclusions to be reached.
Against this backdrop, the leaders examined various proposals to address high energy costs, seeking ways to limit the burden on households and businesses.
Von der Leyen’s Proposal on Natural Gas Reserves
European Commission President Ursula von der Leyen called on EU leaders to consider creating strategic natural gas reserves at the European level, amid growing risks to energy supplies this winter, according to three diplomats and an EU official who spoke to Politico.
Europe’s natural gas reserves are at historic lows, as the high prices that emerged in the markets this summer, driven by the war in Iran, have reduced the incentive to replenish them. As a result, the EU risks entering the winter with insufficient reserves to meet its needs.
According to documents obtained by Politico that outline plans to reform the European natural gas supply security framework in November, the provision of incentives to energy companies to maintain larger strategic reserves is being considered. However, the plans do not explicitly provide for the creation of state-held strategic reserves, which governments would be required to maintain at predetermined levels, regardless of market conditions, in order to cover potential supply shortages.
The exact form that the reserves proposed by von der Leyen might take has not yet been clarified. However, a senior EU official described them as a long-term measure to protect the Union from future disruptions in energy supply, similar to the strategic reserves of oil and petroleum products that member states already maintain.
Mitsotakis’s proposal
As Politico notes, Kyriakos Mitsotakis proposed greater flexibility in fiscal rules in order to fund energy-saving subsidies with resources derived from increased revenue due to high inflation. The Greek proposal is part of the debate over whether existing fiscal constraints allow member statesto more effectively support households and businesses in coping with energy costs without jeopardizing their fiscal balance.
For his part, Austrian Chancellor Christian Stocker, revived a proposal first put forward in June, aimed at enhancing transparency in the EU’s electricity markets.
“Only if we know exactly how energy prices are set can we move forward with the next steps,” said a European diplomat.
Source: iefimerida.gr – EU: The “27” at an impasse over the budget—“Criticism” from Metsola toward leaders; cuts of over 10% on the table – iefimerida.gr
