Spain Rejects A Larger EU Ludget that Delays Aid

The arrival of European funds to overcome the onslaught of Covid-19 is complicated by days. The European Parliament and the Council (which brings together the Member States) remain far apart on the issues that remain pending to close the recovery fund of 750,000 million euros, and the multi-annual budget of just over a trillion euros. And there is also growing opposition from the Member States to increase the Community budget by 39,000 million euros for 2021-2027.

The opposition comes not only from the so-called frugal leaders of the Netherlands, but also from Spain. Although our country has traditionally fought for an ambitious European budget, as it did in July, it considers that the agreement reached then by the leaders was satisfactory, also adding the firepower of the recovery fund. And they fear that opening this melon will further delay the completion of all pending fringes and the arrival of funds. “After five days without sleep in July, raising the ceiling by 39,000 million personally does not seem fun,” said a Spanish diplomatic source on Wednesday.

MEPs ask for more money to reinforce programs such as Erasmus, Innovation or Health, cut by the leaders. Although Spain is “sympathetic” with its position, diplomatic sources warn that “we all know the limits we have”, and remind us that “we don’t have much time.”

The parties aspired to conclude the negotiation of the recovery fund and the multi-year budget next month, so that the fund could be in force from January 1 as planned. However, aid would not arrive until ratification of the increase in the EU budget ceiling is completed in the 27 Member States. Therefore, recovery funds could be delayed until next summer, or beyond. Spain is the second most benefited by the new instrument, with 140,000 million in soft loans and non-repayable aid.

The Portuguese MEP, Margarida Marques, a member of the European Parliament’s negotiating team, points out to elEconomista that “it is clear that we need more money for the future of Europe.” But she explains that, in reality, such a high volume of additional contributions is not being requested. However, Member States practically reject additional contributions en bloc, and at best offer to consider moving items within the spending ceilings already set in July.

Although it is not on the agenda, the issue will likely come up at the summit that will bring together European leaders in Brussels on Thursday and Friday. “If the president of Parliament, David Sassoli, brings up the subject, then we can have a little discussion and clarify some things,” such as the increase in the spending ceiling, explained a diplomatic source.

The extra money is just one front of the bargain. Both sides also disagree on the new conditionality of respect for the rule of law to receive the funds. An issue that not only divides the institutions, given that the European Parliament wants to be tougher than the Council, but also the Member States.

European leaders will also review the status of negotiations with the United Kingdom on Thursday. This summit should have been the final one to seal the future relationship. However, both sides remain mired in the issue of regulatory similarity, including state aid, access to British fishing waters, and the resolution of disputes that may arise. Europeans are asking London for more concessions, while Boris Johnson is also asking Europeans to move, especially on fishing.