European Parliament to fight Council's cuts to EU budget for 2024

Members of the European Parliament’s budget committee criticised EU countries’ cuts to the proposed EU budget for 2024, promising to fight any reductions in the upcoming negotiations.

On Wednesday (30 August), MEPs from the budget committee discussed their position on the EU budget for 2024, presented by the European Commission in June, and reviewed by EU countries in July.

In their common position, EU countries proposed to cut the budget from EUR189.3 billion to EUR187 billion for 2024, with downward adjustments in most budget headings and an increase in the budget for humanitarian aid.

The reduction was highly criticised by EU lawmakers, as the budget proposed for 2024 is already lower in real terms compared to the current year due to high inflation rates, while EU competences – and costs – have substantially increased.

The Parliament, which is now expected to put forward its opinion on the Council’s position before negotiations can start, is likely to reject all cuts which could compromise the execution of EU policies and push for a budget better equipped to address possible crises.

“The Council’s position […] does not account for the reality on the ground,” rapporteur Siegfried Mure?an (EPP) said, pointing out that four of seven headings of the budget would have zero margins left.

MEPs from the main political parties agreed on the rapporteur’s position, promising to work together to counter any reductions proposed by the EU Council.

Concern over interest rates

In particular, EU lawmakers expressed concerns over the high interest rates which have spiked the costs for repaying the pandemic recovery plan, known as NextGenerationEU.

“This is a dangerous situation,” warned Victor Negrescu (S&D), adding that “we pay more to the banks than we allocate for the Erasmus programme.”

In their position, member states agreed to reduce the budget on the financing cost of NextGenerationEU, pointing at a slower interest rate increase in the coming months to justify the budget line cut.

According to Fabienne Keller (Renew), however, this approach is “ridiculous.”

“You may hope that interest rates may drop, but we have no control there. It strikes me as an abysmal idea,” she said.

Meanwhile, a Commission representative said the estimate of the amount needed to cover interest rates will be “refined” in the letter of executability which will assess the Council and Parliament’s reading on the budget following their negotiations.

Similarly to EU lawmakers, the Commission representative also voiced concerns about the Council’s overall approach to reducing the budget, as programmes and agencies are already facing higher costs due to high inflation.

Mure?an accused the Council of “copy-pasting” the budget from 2023, without taking into account the new priorities for the Union, such as the extended mandate of the European Drugs Agency starting from January 2024.

On possible increases to the budget, however, the rapporteur was cautious.

“The budget is very narrow, we should limit ourselves […] to moderate increases in those programmes where they are needed and justified.”

Next steps

MEPs will now work on amendments to the Parliament position in the coming weeks and formalise their stance before entering into negotiations with the Council.

Meanwhile, EU lawmakers will also push to accelerate the revision of the Multiannual Financial Framework (MFF) – the EU long-term budget – seen as an instrument to increase the scope of next year’s budget.

“We’re trying to push forward and use the MFF review to try and get more scope for next year so that the EU budget is not excessively eroded in 2024,” Keller said.

The MFF review is expected to be negotiated in the coming months, but could take longer than hoped for by the Parliament as member states are divided over the Commission’s request to increase national contributions to the EU budget.

[Edited by J?nos Allenbach-Ammann/Nathalie Weatherald]