The EU, COVID 19 and the long term budget

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The EU, COVID 19 and the long term budget

Somalilandsun: EU leaders met to negotiate a support package and a long term budget in the wake of the COVID 19 pandemic and after hard negotiations they succeed to reach a compromise. The joy might however be short-lived since the parliament shows no sign of letting the compromise pass.
Hard negotiations and jubilant reactions

After four days and two nights of negotiations, the leaders of the EU countries earlier agreed  on the long-term budget and the corona support package that was later presented to the parliament. We did it! The EU is strong, the EU is united, says EU Council President Charles Michel at a joint press conference together with the president of the EU Commission President Ursula von der Leyen.

This is a good deal and a strong deal. And most importantly, it is the right deal for the EU right now. We have shown confidence in our common future, said  Charles Michel. French President Emmanuel Macron and Belgian Prime Minister Sophie Wilmès were also jubilant about the new deal.

Resistance from parliament

However, a large number of parliamentarians are not satisfied. The European Parliament have now voted in favour of a resolution calling for changes in the Union’s long – term budget. If the ‘proposal does not improve’, the parliament threatens to vote down the budget later this year. With 465 votes in favour and 150 against, the European Parliament adopted a resolution calling for extensive changes to the EU’s long-term budget. The resolution calls for negotiations to improve the proposal – and at the same time warns that Parliament may vote down the long-term budget if this does not happen. Manfred Weber, group leader of the conservative Christian Democratic EPP, believes, just like the leaders of some other groups in the parliament, that more money is needed to develop a stronger  European coastguard, health protection, research and development, defence and aid. We believe that the long-term budget does not provide proper answers to the challenges of the next seven years. It must become more future-oriented, he says.

Earlier, EU Permanent Council President Charles Michel spoke warmly about both the long-term budget and the corona support package – both results of the tough summit negotiations – as he visited Parliament. My conviction is that this moment is central to European history. We acted quickly and immediately, said Michel. According to Charles Michel, the money earmarked for corona support in the long-term budget for the years 2021–2027  will go a long way in dealing with the the economic consequences of the pandemic  in Europe. The European Parliament is expected to vote on the long-term budget at the end of the year. On the other hand, Parliament has no say in the Corona aid package, even though it is linked to the budget.

The debate we are starting now is really about the meaning and direction we want to give to this European project in the coming years, said Michel. European Commission President Ursula von der Leyen also visited Parliament, lamenting that even if the negotiated package will lead to budget cuts for the EU, the union still managed to avoid the further cuts that some Member States wanted, but this long-term budget is difficult to digest. I know that this House feels the same way, said von der Leyen.

Increased tensions

The turmoil comes in the wake of the intense negotiations between the EU leaders where the core issue was the proportions between direct support to individual countries that don’t need to be paid back and the part that is given to countries as a loan. Sweden, Austria, the Nederlands and Denmark and later Finland called for restraint and opposed a support package that was not based on loans and instead called for a greater level of austerity. , this made the tensions within the EU reach critical levels. Even if the EU leaders managed to agree on a deal it is less than certain it will pass trough parliament without extensive augmentations. The latest developments show a deepening rift within the EU, a rift that threatens the long term survival of the union unless something is done to bridge the gaps that appear on an increasing number of fronts.

The author Henrik G.S. Arvidsson is an award-winning researcher and lecturer in international business and marketing. He has over 25 years of experience as a business consultant and currently owns businesses in the fields of business consultancy, fiduciary, recruitment, and logistics.

The co-author Ruslana Arvidsson is a political scientist and business consultant, specialised in innovative governance and innovation.

www.economist.org.uk

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