Fourteen EU member states have teamed up against the EU Commission to protest Brussels’ budget reform plans that are set to be officially unveiled later this month, joining nearly 150 regional governments opposing the move last month.
The non-paper (unofficial policy document) was signed by the governments of mainly Southern and East-Central European countries who are the primary beneficiaries of EU cohesion funds, which the Commission wants to restructure in order to redirect some funding to security and defense.
In the paper, they argue for the need to preserve the cohesion policy as its own, separate funding mechanism, together with its region-based allocation model. Scrapping the model would undermine one of the most important political goals of the EU, they said, which is narrowing the economic disparities between sub-national regions of the Union.
Currently, the nearly €400 billion worth of cohesion funds are the second largest single cashpot in the seven-year EU budget after the agricultural funds (CAP), and it’s distributed regionally on a GDP per capita basis to help less developed areas reach the EU average faster.
According to the plans for the next multi-annual financial framework (MFF) after 2027, the Commission will break up the single pot and restructure it as “national investment plans.”
The reforms would merge both cohesion and CAP funds with other items, such as green transition and innovation, and they would no longer be distributed automatically to regions but to national governments based on a new ‘cash-for-reforms’ model, which would tie payments to specific milestones for each country and open the door for political and ideological blackmail like we’ve seen in the case of the conditionality mechanism of the pandemic relief funds.
Apart from changing the distribution method, this flexible approach will also allow the EU to significantly cut funding over time, with just the agricultural funds expected to drop by 15-20% in the next budgetary period. Farmers’ organizations and right-wing parties in the EU parliament have been protesting this budget merger for months, but the Commission refuses to listen.
The work is cut out for the 14 member states if they want to block the planned reforms, given that the biggest net contributors to the EU budget, such as Germany and France, have expressed support for the Commission’s plan. At least the opposition countries have Spain and Poland on their side as the countries with the most political weight, but the battle could be lost as soon as the Commission finds a way to get them aboard.
