Central and East European EU member states face a battle to preserve lucrative EU funds for agriculture and social cohesion as Britain prepares to leaves the 28-nation bloc, and as the EU draws up a new post-2020 multi-annual financial framework, MMF, according to the Bertellsman Stiftung.
The German think tank’s new paper on the key issues likely to arise in upcoming budget negotiations notes that Romania and Bulgaria will be among the CEE countries potentially affected by savings forced on the EU by the loss of British financial input.
It notes that Britain’s exit is likely cost the EU about 6 billion euros a year, as the UK contributes some 12 billion euros a year to the EU and gets back in various forms about half that sum.
Meanwhile, it recalls that the Commission has stated that half of this loss – some 3 billion euros a year – must come from savings, while the other half must come from fresh sources.
The paper notes that CEE countries, including Bulgaria and Romania, have already expressed firm opposition to some of the ideas presented in the Commission’s June 2017 document, “Reflection paper on the future of EU finances”.
Both Romania and Bulgaria are major gainers from the EU’s Common Agricultural Policy, CAP and cohesion funds.
Germany and Britain are the two biggest net losers in the EU under the CAP.
The net gainers from the CAP are almost all in the eastern half of Europe, with the exception of Portugal, Ireland and Spain.
Poland the Greece are the two biggest gainers from the CAP – but Romania now comes in third place, netting almost 2 billion euros a year under the CAP.
Bulgaria comes in sixth place, behind Hungary, netting over 800 million euros a year.
Another possible budget “reform” likely to alarm Balkan EU member states is to the EU’s social cohesion funds – allocated mainly to regions whose GDP is less than 75 per cent of the EU average.
Unsurprisingly, almost all those regions are in Eastern and Southeast Europe – except for Portugal, a small part of Spain, the south of Italy and Wales in the UK, and the far west Cornish region of England.
The debate on the post-2020 MMF “will be very sharp”, the Bertelsmann Stiftung predicts – with “old” Europe demanding savings to expensive budgets, and also greater conditionality, in terms of adherence to the rule of law – and with “new” Europe resisting all the above.
Demands for greater conditionality in terms of access to funding have grown in the light of recent events in Poland, where the nationalist government has pressed on with judicial changes that Brussels opposes. “Squaring the circle”, it adds, will be a challenge.