Green Deal a False Alibi for the EU Budget

Today’s extraordinary summit marks the start of the paramount phase of negotiations on the EU’s Multiannual Financial Framework (MFF) for 2021–2027. But in light of the course of negotiations to date, there is a risk that concentrating a large part of the budget on truly European tasks will not be possible. A new climate policy rhetoric could be misused for a continuation of large transfers to farmers and regions, even though this relabeling isn’t accompanied by effective ecological conditions. This is the conclusion of a ZEW expert brief on the MFF negotiations.

The analysis shows how far apart interests are regarding budget size. While the European Parliament is demanding 1,324 billion euros for the seven-year period, net contributor states such as the Netherlands and Austria want to spend 300 billion euros less. The most important question, though, is not the level of expenditure but the structure of the MFF. According to the ZEW expert brief, the basic problem is therefore the narrow view of all Member States on the budget. Budget items such as agricultural policy and cohesion, which finance transfers to the home country, are quite popular. By contrast, policy areas such as climate protection, defence, development aid and migration receive little support.

The ZEW expert brief provides clear recommendations. Direct payments to farmers should be reduced or transformed into a policy that prices measurable achievements in the fields of climate, environmental, and animal protection. Cohesion funds should be concentrated on countries and regions in need and the European Commission should be supported in its attempt to reduce funding for countries that violate the rule of law. However, tapping new own resources and having more money available for the budget do not solve any of the underlying problems.

“It is disastrous that many politicians in national governments and in the European Parliament still see the EU budget primarily as a politically useful source of funding for projects in their own constituencies. As a result, European funds are wasted,” says Professor Friedrich Heinemann, research department head at ZEW and author of the ZEW expert brief. The climate policy rhetoric of the ‘Green Deal’ will also come to nothing if the budget is not properly restructured. “If agricultural and cohesion funds are distributed largely according to the previous distribution key but under a new climate label, the Green Deal will ultimately become a false alibi for preserving the status quo in the EU budget,” according to Heinemann’s assessment. This is the wrong conclusion of a Union which, after Brexit, should do everything in its power to increase its appeal and its overall benefit for its members.