Peter Becker A New Budget for the EU

SWP Research Paper

Peter Becker

A New Budget for the EU

Negotiations on the Multiannual Financial Framework 2021?2027

Stiftung Wissenschaft und Politik German Institute for

International and Security Affairs SWP Research Paper 11 August 2019, Berlin

Abstract

Negotiations on the EU's Multiannual Financial Framework (MFF) are always lengthy, complex and conflictual. This applies to the MFF 2021?2027, which is expected to have a financial volume of around 1.3 trillion. As usual, the negotiations revolve around political priorities, the expenditures determined for each of them, and the distribution of the financial burden among member states. This ongoing process is hampered by the forthcoming Brexit, as the UK has so far contributed substantial amounts to the Union's budget. Furthermore, there are new tasks for the EU which require additional resources, such as the establishment of a defence union, increased protection of the EU's external borders, and the stabilisation of the euro zone.

Since the European Commission presented its proposal for a pragmatic reform of the EU budget on 2 May 2018, the member states have been negotiating a comprehensive package. However, cohesion in the coalitions of net contributors and net recipients is dwindling. The delicate negotiation framework makes the course and results of the search for consensus more difficult to foresee, and the actors less predictable. Due to the increasing uncertainty, all participants expect Germany to play a balancing role. Many countries hope that Germany, as the strongest economy and the largest net contributor, will provide additional resources to facilitate a successful conclusion of the negotiations on a new MFF. The German government therefore needs clear and firm ideas about the fields in which it wants to modernise EU policies and to further Europeanise and communitise them.

SWP Research Paper

Peter Becker

A New Budget for the EU

Negotiations on the Multiannual Financial Framework 2021?2027

Stiftung Wissenschaft und Politik German Institute for

International and Security Affairs SWP Research Paper 11 August 2019, Berlin

All rights reserved.

? Stiftung Wissenschaft und Politik, 2019

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SWP Stiftung Wissenschaft und Politik German Institute for International and Security Affairs

Ludwigkirchplatz 3?4 10719 Berlin Germany Phone +49 30 880 07-0 Fax +49 30 880 07-200 swp- swp@swp-

ISSN 1863-1053 doi: 10.18449/2019RP11

(Updated English version of SWP-Studie 14/2019)

Table of Contents

5 Issues and Recommendations 7 Introduction 8 The European Commission's Proposal 8 The Expenditure Side: Budget Volume and Priorities 11 Budget Financing: New Sources, No Rebates 11 Difficult Evaluation with a New Point of Departure 12 First Reactions and Positioning 15 State, Course and Structure of the Negotiations 15 State and Course of Negotiations 16 Group Formations of Member States 19 What's New in the Current MFF Negotiations? 19 The UK's Withdrawal from the EU and the Consequences

for the MFF Negotiations 22 New Reform Projects and Negotiation Topics 30 Changes in the Process Flow 32 Further Negotiations and the Role of Germany 32 Scenario for the Further Course of Negotiations 33 Germany's Role in this Scenario 34 Abbreviations

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