EU agrees on 2020 budget

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An agreement has been reached in the dispute over the billion-dollar EU budget for 2020. As the Finnish presidency confirmed late this evening, more than 168 billion euros will be made available for disbursements next year.

The governments of the European Union, the Parliament and the European Commission have presented the 2020 budget. Expenditure to combat climate change, to protect the EU’s borders and to set up its own satellite system in Europe has been increased. For the coming year, the EU committed itself to financing projects worth 168.7 billion euros – 21 percent of which will be used to fight climate change.

The budget includes around €60 billion to support agriculture, fisheries and biodiversity and nearly €59 billion to reduce economic and social disparities between European regions. A further nearly €25 billion will be allocated to research and innovation in the EU, youth education programmes, small and medium-sized enterprises and the European Galileo satellite programme.

The system will make the EU independent of the US Global Positioning System (GPS). Around 14 billion euros are available for EU security, humanitarian aid and the newly created European Border Guard with 10,000 operational staff to manage the EU’s external borders.

Question of reserves a sticking point

The ceiling of 168.7 billion euros refers to payment obligations which the EU can enter into in 2020 for subsequent years. In concrete terms, Brussels can pay out almost 153.6 billion euros. This amount increases by 3.4 percent compared to the previous year.

The question of how much money should be in the reserve budget was one of the points of contention in the negotiations. The EU Parliament has recently demanded an amount of 159.1 billion euros, while the member states want to approve only 153.1 billion euros. The member states had pleaded for a reserve of more than four billion euros for unforeseen events and pointed out that this could be needed if there were still an unregulated Brexit or if more money had to be made available to Turkey for the refugee deal. Parliament, on the other hand, originally took the view that a much smaller reserve would be sufficient.

Germany largest net contributor

The negotiations were of particular importance for Germany, as the federal government, as the largest net contributor to the Union, contributes more than a fifth of the EU budget. A large part of the money flows into payments to farmers and comparatively poor regions in the EU countries.

The German delegation said in the evening: “We have found a good compromise that strengthens Europe and secures the European Union’s ability to act. The Council and Parliament has been able to work together to ensure that the EU would make greater use of its financial resources for current priorities such as climate protection, economic growth, migration and security. It was an important success that the budget contained a buffer for risk provisioning in order to be able to react quickly to unforeseeable challenges in the next financial year if necessary.”

Tough negotiations on financial frameworks

The final negotiations on the EU financial framework for the years 2021 to 2027 are likely to be much more difficult than the discussions on the EU budget for 2020. The framework is the basis for the individual budgets and is therefore particularly relevant. So far, EU governments have not even reached a common position for negotiations with Parliament.

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