Hopes dim for EU budget deal


Brussels (AFP)

Feuding EU leaders kicked off a second day of haggling over the bloc's trillion-euro budget Friday, with hopes of a deal fading as "frugals" and free-spenders refused to give ground.

After a night of tough talks, leaders and diplomats poured doubt on the chances of reaching an agreement at this summit for the EU's seven-year post-Brexit budget.

The tussle over money is a Brussels ritual, made more intense this time by the departure of Britain from the bloc, which has left a 75-billion-euro ($81-billion) "Brexit gap" over the 2021-27 period.

"Are you asking if we're going to resolve the whole budget discussion this weekend? No, I don't think so," Danish Prime Minister Mette Frederiksen said as she arrived.

Denmark is one of the self-styled "frugal four" -- along with the Netherlands, Sweden and Austria -- who have set themselves against a proposal by summit host Charles Michel, the EU Council president.

They insist Michel's 1.09-trillion-euro budget plan is excessive and must be trimmed, while also calling for the budget to be modernised.

- 21st-century challenges -

Leaders are at odds over how much the multi-annual financial framework (MFF), as the long-term budget is called, should rise by.

They also disagree over how spending should be shifted between priorities and how much each member state should pay as a percentage of its gross domestic product (GDP).

The last MFF came in at 1.08 trillion euros (in 2018 prices).

"My prime minister has been very clear from the start -- we will not pick up the tab," said a "frugal" diplomatic source.

"We are fighting 21st-century challenges with a budget made in the 1980s."

Against the frugals are France, which wants farm payments protected and more money for European defence projects, and the so-called "friends of cohesion".

This group of eastern and southern countries wants to ringfence money they get to help bring infrastructure and society up to the level of wealthier counterparts.

After a night of inconclusive consultations, Michel will convene the leaders at midday (1100 GMT) to canvass views once more.

But given the differences between the 27, it is not certain Michel will present a revised budget proposal on Friday, a diplomat told AFP.

Instead, the summit could break up without agreement, forcing leaders to reconvene for another meeting, most likely in April.

A frustrated Czech Prime Minister Anrej Babis questioned the value of a second day at the summit, saying if the rich countries were not prepared to move, "then we have nothing to discuss".

- Farm fight -

The inconclusive late-night tussle on Thursday revealed leaders' red lines and potential grounds for compromise to Michel, who is tasked with finding consensus for a deal.

French President Emmanuel Macron, two days out from a visit to the national farm show in Paris -- a crucial annual rite of passage -- said he would "battle" to protect the Common Agricultural Policy (CAP).

"The overall budget total was brutally attacked by the countries of the north, in particular the CAP," a French diplomatic source said.

In a sign of French sensitivity on the subject, Macron's agriculture minister suggested in a TV interview that he had secured a victory in protecting the CAP, which was worth 383 billion euros in the current long-term budget.

The claim was swiftly shot down by French diplomats who pointed out that nothing had yet been agreed.

Macron has sought to push the EU to be more united and more ambitious and insisted Thursday that Britain's departure should not clip the bloc's wings.

But his calls for post-Brexit largesse were met with scepticism by the "frugals" and even Finland, whose prime minister said it was time for the EU to be "realistic" with its spending.

Finland, like Germany, is sympathetic to some of the calls for moderation made by the "frugals", but is not fully aligned with them.

Adding yet more discord is the European Parliament, which wants the MFF hiked to 1.32 trillion euros to pay for costly goals such as turning the European Union into a carbon-neutral economy within three decades.

Parliament President David Sassoli slammed Michel's proposal as "a series of cuts".