The future of Europe

The European Commission has presented the draft European Budget for the period 2021 – 2027, the first European budget post Brexit. Malta is among other countries that will experience a cut, but the next Budget poses greater challenges that will shape the future of Europe at a critical time.

The aim is to have the budget approved prior to next year’s European Parliament election and it will face a long period of negotiations that will in one way or another affect the lives of EU citizens.

According to European Commission President the new proposed budget had to face the post-Brexit budget departing with an estimated deficit of an annual €15 billion gap created by the UK’s departure.

The proposed budget promises:

• More funding for priority areas
• A new mechanism to protect the EU budget from financial risks linked to the rule of law
• A strong focus on European added value and on performance
• Less red tape for beneficiaries
• A more flexible and agile budget with a clearer and leaner architecture

The aim of the Budget is to empower the EU post Brexit and enhance competitiveness. This will be done through the thematic priorities – research and innovation (with a focus on digital), youth, climate and environment, migration and borders, security and external action.

The Hungarian government was among the most critical of the proposed Budget. Zoltán Kovács, Secretary of State for Public Diplomacy and Relations in the second cabinet of Viktor Orbán, wrote: “it uses the common Budget for political gains, gives funds to rich countries and takes from the poor, and uses OLAF as a means of political blackmail”.

There was also anger at the proposals in relation to the Common Agricultural Policy (CAP). The French government said Brussels’ Budget proposals for the CAP were “unacceptable”. “Such a drastic, massive, and blind drop is simply unthinkable” and France ”will not accept any decline in direct income for farmers”, the French Agricultre Ministry said.

A positive response came from Michael Schneider of the EPP Group although he still had reservations on the reduction of funds that affects investments in regions and cities.

The proposal affecting regional and local funding was rebutted by PLATFORMA, the European coalition of local and regional governments. The coalition said the European Commission had forgotten local and regional governments in the new Neighbourhood, Development and International Cooperation Instrument.

Malta together with Hungary, the Czech Republic, Lithuania, Estonia and Poland are set to experience budget cuts. A reduction of 24% of cut in funding is expected according to to an analysis conducted by the Financial Times.

Denmark’s Prime Minister Lars Lokke Rasmussen and Dutch Prime Minister Mark Rutte are among those suggesting a cut in total spending.

The Finnish statement hints towards an Autumn 2019 agreement. This may result in further hurdles for the Budget as a new Commission and Parliament are newly installed.

The long negotiations will shape the future of the EU – a future facing more threats from within than most like to portray. The populist politicians elected across Europe will not easily accept new proposals that would hinder national administrative powers or extra scrutiny.

Italy’s interior minister Matteo Salvini, who is also Deputy Prime Minister, told German magazine Der Spiegel that the EU’s response to its multiple challenges over the next year will show “whether the whole thing makes sense any more.”

Yet the European project remains as important as ever, particularly because of the challenges posed by the rise of populism across Europe that is a real threat to democracy.

The report by Institute for Global Change concludes that the rise of the populists has already changed the social and economic policies pursued by many countries; created new tensions between nation states within Europe; and begun to put pressure on democratic institutions in a variety of countries that had once been seen as consolidated democracies.