EU leaders will enter the Europa building in Brussels on Thursday with a long fight to come — and a long battle behind them.
Since EU officials first laid out a blueprint for the next seven-year spending plan in 2018, each of the bloc’s 27 governments has been stalling, maneuvering and strategizing with the aim of reaching this moment in a position of ascendancy.
After leaders arrive for the European Council special summit at 2 p.m., the hours and possibly days that follow will be dominated by the bilateral meetings — between leaders and Council President Charles Michel, and between allies — that will shape the finest of political balances needed to agree the EU’s long-term budget.
Whether that balance for the 2021-2027 period can be achieved at this week’s summit (the first attempt) remains unknown, and many are skeptical. If past experience is a model, leaders may opt to test others’ red lines a little longer, leading to a second summit.
Either way, POLITICO has you covered on everything you need to know to understand the budget talks.
THE PROPOSALS
The balancing act: The point of departure for leaders is a 53-page, carefully-worded proposal by Michel. Some of the fundamentals include the total budget size (€1.095 trillion), the continuation of rebates and concessions to the East. Read POLITICO’s eight takeaways.
The one to reject: Michel’s plans took inspiration from a December proposal by the Finnish Council presidency, which was at the time vocally derided by all sides but could yet prove to be the earliest template for the final deal. Here’s our rundown of what that looked like.
Where it all began: The European Commission set the direction with a May 2018 proposal. Faced with filling a budget hole after Brexit, it asked for €1.135 trillion over seven years and proposed a huge whack to agriculture and cohesion funds in favor of a boost to research. We took a look at who was glad, sad and mad about the original EU budget plan.
THE PLAYERS
Charles Michel: The former Belgian prime minister has shown his commitment to brokering a budget deal since taking office December 1. After announcing plans for a February summit, he launched a marathon week of 19 bilaterals. We took a look at Michel’s first test.
The Frugal Five: Austria, Denmark, the Netherlands, Sweden and Germany want to limit overall spending and on Monday were the loudest critics at a key General Affairs Council meeting ahead of the summit. Here’s a full readout for POLITICO’s EU Budget Pros.
António Costa, cohesion champion: Portugal’s Costa has seized the role of flag-bearer for poorer regions in the South and East fighting to protect EU funds for cohesion. Lili Bayer and Ivo Oliveira dived into the political risks that this carries for the socialist prime minister.
The other tribes: The budget battle is a multidimensional game: alongside the frugals and the cohesion camp lie groups such as Friends of the Farmers, but countries aligned on one issue might be opponents on another. Catch up with our essential guide to the EU budget tribes.
THE ISSUES
Rule of law: Plans to link EU payouts to respect for the rule of law have pitted Poland and Hungary, among others, against budget heavyweights such as Germany. That fight became particularly vicious heading into last year’s European Parliament election.
Agriculture: The Commission’s plans for a massive cut to agriculture subsidies proved the proverbial red rag even before they were officially announced. But as well as total funding, the fight over farming also hinges on more technical details — the three Cs of capping, convergence and coupled payments. Revisit our 2018 essential guide to those elements, and where each country stands.
Climate: Brussels went big on its promises to help countries tackle climate change before figuring out exactly how, making a proposed €7.5 billion Just Transition Fund a major point of tension. Poland raised the stakes at the last European Council summit in December, with a messy fudge that saw the country swerve a commitment to 2050 climate goals.
New revenues: The European Parliament is pressuring governments to create new EU revenue streams, but a suggested carbon border tax offered a great example of the difficulties that posed. Wanted: Perfect design for Europe’s carbon border tax.
THE POLITICS
Every man for himself: Ultimately, the EU budget fight is about getting money for home interests — and that means tailored messaging to win support. The Central European mayors pitching for EU funds to fight populism are one of many groups fighting for a slice of the pie.
Every country’s interests: Our 2018 guide of every country’s key priorities is the ultimate reference to determine who wins and who loses in the final budget deal.
This article is part of POLITICO’s coverage of the EU budget, tracking the development of the seven-year Multiannual Financial Framework. For a complimentary trial, email [email protected] mentioning Budget.