Germany goes frugal ahead of EU leaders’ summit

9 months ago 25

Germany opposes any increase in the EU’s long-term budget beyond the €50 billion in aid planned for Ukraine, government officials said ahead of the EU leaders’ summit on Thursday and Friday, citing the country’s domestic budget crisis.

At the European Council summit on Thursday and Friday, EU heads of state and government hope to agree on EU enlargement and the mid-term revision of the EU’s seven-year budget from 2021 to 2027.

But Germany has already made it clear that it is unwilling to top up its contributions to the EU in the coming years, apart from paying its share of a €50 billion aid package to Ukraine.

“A mid-term review of the financial framework should take place in the event of unforeseen circumstances,” a senior government official said, adding that “this is the case for Ukraine support for the next few years.”

Increasing aid to Ukraine was also necessary to signal to other donors, such as the US, “that we are participating appropriately,” the official said. “And, of course, to signal Russia that our support is unwavering.”

The official also stressed that the ongoing budget crisis does not threaten Germany’s contribution to the fund, as all parties in Germany’s coalition agree on support for Ukraine.

“For all other issues, we believe that solutions must be offered within the existing financial framework, which means primarily through prioritisation and redeployment,” the official added, indicating that Germany was unwilling to give up its ‘frugal’ stance.

This was also backed by some unofficial position papers known as ‘non-papers’ circulated by other cash-strapped EU countries such as Sweden and Finland, which showed that sufficient funds were available for redeployment, the official said.

Alongside the increased support for Ukraine, the European Commission proposed topping up other parts of the EU’s finances in June, including €10 billion for a ‘strategic technology platform’ (STEP) and more money to tackle migration and partnerships with third countries.

A compromise proposal circulated by Spain last week had seen the additional funding for those issues drastically reduced but failed to gain member states’ support.

“All member states have to deal with considerable consolidation requirements,” the German government official said, adding that “here in Germany, of course, the judgement of the Federal Constitutional Court has once again reinforced this necessity.”

Germany’s constitutional court had ruled it unlawful to use debt taken on in an emergency outside the country’s strict ‘debt brake’ for spending in subsequent years, leaving the government with a €60 billion hole in its long-term finances.

(Jonathan Packroff | Euractiv.de)