The EU’s top officials argued for a swift approval of the EU budget by the European Parliament on Thursday, as MEPs criticised the cuts to EU policies agreed by the national leaders earlier this week.
European Council president Charles Michel in a speech to legislators argued that the almost €1.1 trillion seven-year budget and the €750bn rescue package mitigating the economic fallout of the pandemic are historic.
He stressed that it is the first time the EU has agreed to borrow collectively, that a budgetary fund is dedicated to fighting climate change, and that EU funds have been linked to the respect of the rule of law.
Michel told MEPs that compared to the size of its economy, the EU’s fiscal response to the crisis is greater than the that of the US or China.
EU Commission president Ursula von der Leyen tried to quell criticism by MEPs by saying the parliament will have a say in the distribution of the recovery fund. She said the commission is ready for a “regular exchange of views on national plans and implementation”.
MEPs had complained that while EU leaders agreed that even one member state can raise the alarm if another country benefitting from the recovery fund is not implementing reforms, the parliament has no oversight.
Von der Leyen, addressing another key concern of MEPs, said “the big winner is the ‘own resources'” in the deal.
The parliament has long argued for more of these EU-level taxes. Now, EU leaders agreed to a plan on future levies to help repay the joint debt taken on by the commission to finance the recovery.
She said the commission will come forward with a package on digital levies, carbon border-adjustment mechanism and a reform of the Emissions Trading Scheme.
Von der Leyen also stressed that EU funds are now linked to governments observing the rule of law.
She said the commission will now look into its earlier legislative proposal on the issue, from 2018, and “make sure it is taken forward and improved”.
The agreement by EU leaders on rule of law is not clearly formulated, but the commission’s earlier proposal suggested a stronger instrument that what leaders seemed to have given their blessings on earlier this week at their summit.
The German commission president acknowledged that the deal on the budget might not be ideal, but urged MEPs to approve it quickly.
“This budget is a difficult pill to swallow,” she said, adding that, along with Michel, they prevented further cuts and that the value of EU programmes far outweigh the cuts.
“We are for the moment not ready to swallow the bitter pill you referred to,” retorted Manfred Weber, the leader of the centre-right European People’s Party group in the parliament – the same political family von der Leyen belongs to.
The German MEP pushed back against pressure on the parliament to approve the budget quickly, saying the commission’s proposal has been on the table for two years.
Weber said the budget is “not enough future-oriented”, and pointed to cuts in border control, defence, innovation and health.
Weber said he is concerned over the “rationalisation” of EU recovery funds. “My fear is that it will be spent here and there on national favourites,” he said, adding that it will be then difficult to explain to citizens where is the added value of the EU money.
Weber, whose group counts Hungary’s ruling party among its members – which was a fierce opponent of linking EU funds to the rule of law – urged for a clear instrument on respecting the rule of law.
“We need a roadmap, a clear plan for implementing the principle ‘no money without respecting the EU rules and mechanisms’,” Weber said.
The leader of the Socialist & Democrats group, MEP Iratxe Garcia, said her group does not accept the cuts, pointing to research, the Erasmus study program, digitalisation and humanitarian aid.
Liberal leader Dacian Ciolos also argued that European projects “must not be sacrificed” in favour of cuts.
The majority of MEPs are expected to back a resolution on Thursday outlining their demands in return for accepting the budget.