The historic agreement of the European Council had been preceded by intensive negotiations concerning a compromise on the Multiannual Financial Framework (MFF), which is acceptable to all Member States, and on the recovery plan. That these negotiations proved to be extremely tough, was in particularly down to the attitude of the “Frugal Four”, who were vehemently against a solidary debt policy – in form of grants to Member States most affected by the Coronavirus crisis. However, the negotiations were also made more difficult by Poland and Hungary, both of whom opposed linking the funds to binding principles of the rule of law.

European Parliament Resolution

Immediately after the European Council’s announcement of an agreement, Parliament voiced strong criticism. In a Resolution, which was adopted with a clear majority on 23 July 2020, Parliament basically welcomed an agreement. However, cuts to health policy, research and climate protection were criticised as vehemently as the lacking creation of conditionalities in respect of the rule of law. Cuts to the MFF would adversely affect the interests of the EU and its political priorities, with the Green Deal and the digital transformation leading the way. Apart from that, the Resolution demands a democratic participation of Parliament with regard to setting up the recovery instrument. In concrete terms, the Parliament is missing the opportunity in the Council Resolution to check, where the funds of the recovery instruments are to go and whether these are indeed invested in green issues.

Challenge by Parliament

Following the start of the negotiations with the Council on the MFF (including the planned own resources) and the recovery plan the week before, the European Parliament Committee on Budgets met on Tuesday, 1 September 2020 to debate the current status. The mood among speakers was combative throughout. In particular, a reduction of  the funds, which had been earmarked within the scope of the MFF for the EU’s flagship programmes – such as Horizon Europe or Erasmus+ – was unacceptable. One would make it clear that accepting the MFF in this form would not be an option for Parliament. The argument that in view of the current crisis time would be of the essence, was rejected. Several MEPs pointed out that Parliament had already been ready for MFF negotiations two years ago. It was not Parliament’s fault that no progress had been made so far. It would not be coerced to signing a bad agreement. Apart from that, several MEPs emphasised the importance of Parliament’s unified and united front. Only then it would be possible to prevail in the negotiations.

Historic agreement with concessions

As pointed out by experts of the Chamber of Labour, the compromise found by the European Council is a definite improvement compared to the current EU budget; however, overall it falls short of the possibilities for the sustainable development of wealth and wellbeing in the EU. In view of the probably largest economic and social crisis in the EU’s history, the EU Parliament has now to pave the way for quick counter measures, whilst at the same time demanding appropriate improvements – in particular in respect of Parliamentary control.

The AK welcomes the Recovery plan “Next Generation EU”; however, it is in favour of various improvements. It criticises among other linking grants to Member States to the European Semester and points out that resources for the European Social Fund Plus (ESF+) have to be significantly increased. Apart from that, it should be clear that employees and consumers, who already shoulder the main burden of the EU budget, must not be burdened further. 

Further information:

AK EUROPA Position Paper: The EU budget powering the recovery plan for Europe

AK EUROPA: EU Council with landmark agreement on the European recovery plan

AK EUROPA: Europe’s moment: Commission presents recovery plan

A&W Blog: EU-Budget 2021-2027: Would you mind a little more?