EU budget: Charles Michel's proposal is 'a step in the right direction'

EU budget: Charles Michel's proposal is 'a step in the right direction'
Credit: Belga

On Tuesday, Belgian Prime Minister Sophie Wilmès said in the Chamber that the basis for negotiations proposed by Charles Michel to reach an agreement on the EU's 2021-2027 budget and the post-coronavirus recovery tool is "a step in the right direction."

The two subjects, the second being "backed" by the first, will be on the agenda on Friday and Saturday for the heads of state and government of the EU member states, meeting in Brussels for the first time since the outbreak of the pandemic.

For Wilmès, Michel's latest proposal amounts to a welcome reduction in the additional effort that will be required of Belgian finances.

In May, the Commission put forward its new proposal for a multi-annual budget for the next 7 years, as well as its vision for a recovery instrument ("Next Generation EU") which is supposed to maintain a strong single market by supporting the countries most affected by the coronavirus crisis.

Last week, the President of the European Council issued his "negobox," a framework with figures that will serve as a basis for negotiations between the member states.

At €1.074 billion, it aims a little lower than before in terms of the budget, but maintains most of the Commission's ideas for the additional €750 billion "recovery" fund. The latter would be financed by a European loan, to be repaid from 2026 and partly from new European own resources.

"This proposal for a Negobox is clearly a step in the right direction. Our demands, pleaded and re-pleaded, are met for some, partially for others," explained Wilmès on Tuesday before the federal advisory committee in charge of European issues.

"But everything still has to be negotiated with the 27," she added. "It will be a question of finding a balance between the ideal and the achievable."

The demands that the Prime Minister mentions have been put forward by Belgium for months. First of all, the demand of a fund that would come to soothe the wounds of Brexit. And for the first time, Michel's negotiating box includes a Brexit "adjustment reserve" of €5 billion. Wilmès will continue to insist on this, she said.

There is also the delicate issue of customs duties. Belgium wants to keep the amounts that states are allowed to withhold from customs duties collected at their borders in the form of "collection fees" as high as possible.

In February's proposal from the President of the Council, these were reduced from 20% (currently) to 12.5%, a major loss of revenue for Belgium. In the new version, the figure has risen to 15%, which is enough to give Wilmès a little relief, "even if it's well below what we want."

Taking this development into account, among other things, Belgium's additional net contribution to the European budget over the next few years, or rather the impact of this new budget on national finances, would be €1.4 billion annually, rather than €1.7 billion in the previous proposal, Wilmès estimated.

The Brussels Times

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