EU chief concerned about budget cuts

BRUSSELS (Reuters) – The head of the European Union’s executive arm, German conservative Ursula von der Leyen, said on Wednesday she is concerned about the “severe cuts” proposed for the bloc’s long-term budget from 2021.

European Commission president von der Leyen was commenting on the recent proposal by Finland, which currently holds the EU’s rotating presidency, as a tug-of-war between the bloc’s member states drags on over their joint spending for 2021-27.

“I am concerned about the severe cuts that are in this proposal,” von der Leyen told a regular news conference.

Under the Finnish plan, the budget would be capped at 1.07% of the bloc’s gross national income. That is less than a ceiling of 1.11% put forward by the commission and the 1.3% proposed by EU lawmakers, but above the 1% limit pushed by the biggest net payer Germany.

National EU leaders will lock horns on the matter at their final summit of the year in Brussels next Thursday and Friday, and hope to reach a final deal next year.

The bloc of 500 million people has ambitions to tackle new challenges – from migration to the climate crisis – but its resources are dwindling. Always politically sensitive, the talks are complicated this time around by Brexit, with Britain’s looming departure potentially leaving a gaping hole in the EU’s joint coffers.

While the rich net payers do not want to pay more to cover the shortfall, poorer countries like Poland do not want to forsake any of the generous aid they receive from the EU.

Eventually, all EU member states as well as the commission and the EU Parliament must agree unanimously on the budget for there to be a deal. Otherwise, the bloc’s funding for projects from security to student exchange programs would be at risk.