Strong Opposition Emerges Against EU's €1.8 Trillion Budget Proposal

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In a significant turn of events, the two largest factions in the European Parliament are preparing to challenge the European Commission’s ambitious budget proposal of €1.8 trillion, intended to span over the next seven years. This proposal, spearheaded by President Ursula von der Leyen, is now facing scrutiny from both conservative and socialist lawmakers who are calling for the withdrawal of a crucial component originally outlined in July.

This emerging conflict indicates a deeper rift between von der Leyen and Parliament, characterized by ongoing tensions. After narrowly escaping a no-confidence vote in July, von der Leyen now faces two additional motions next week, although she is expected to navigate these challenges successfully.

The desire for a revised budget

In a clear message to the European Commission, the Socialists and Democrats have expressed their readiness to push for the withdrawal of the existing budget proposal. They advocate for a revised version that adequately addresses their concerns.

“We are prepared to ask the Commission to retract its current budget plan and propose a more comprehensive alternative,” they stated in a communication to POLITICO.

Concerns over agricultural funding

At the core of the disagreement is the proposal to combine agricultural subsidies and regional payments, which constitute a substantial portion of the budget, into a single fund managed by national governments.

Both the European People’s Party (EPP) and the Socialists have raised their concerns, suggesting that this approach may disguise potential reductions in financial support for farmers, a key demographic for the EPP.

While the Commission has dismissed these claims, the EPP has indicated its intent to reconsider the proposal.

Several lawmakers have confirmed that discussions are ongoing to abandon it, primarily due to its implications for agricultural interests. Daniel Köster, a spokesperson for the EPP, stated that the proposal could disrupt the internal market, potentially leading to fragmentation within the agricultural sector across the EU.

Socialist objections and the future of negotiations

The Socialists’ opposition is rooted in their belief that the current budget does not allocate sufficient resources for essential social projects. Their initiative could complicate negotiations regarding the overall budget for the years 2028 to 2034, as the Parliament’s approval is ultimately essential for the budget’s enactment.

Although the Commission theoretically has the power to dismiss these parliamentary appeals, doing so could create significant obstacles in the future. Consequently, pressure is mounting on the liberal Renew Europe group, a crucial ally of von der Leyen’s pro-EU coalition, to take a definitive stance, even amid their own internal divisions.

Renew Europe’s position

Historically, the Renew Europe group has criticized the shift towards a single national fund for agricultural payments. However, it remains uncertain whether they will align with the call for the Commission to withdraw the proposal. This indecision underscores the complexity of the current political landscape, as differing priorities and concerns circulate among various factions.

Wider implications for the EU

The broader ramifications of this budget debate extend beyond financial allocations; they touch upon the EU’s collective strength and unity in facing external challenges. For instance, the European Central Bank has expressed concerns that utilizing Russian assets could undermine the euro’s credibility, further complicating the economic narrative.

Moreover, as frustrations grow regarding Prime Minister Viktor Orbán’s pro-Russian stance, Brussels has announced that it will limit advance payments, releasing only €163.5 million. In this context, von der Leyen has proposed that a zero-interest reparations loan could be partially directed towards enhancing the EU’s defense industry, reflecting a growing recognition of the need for a robust military presence.