Zürcher Nachrichten - Defence, joint debt and farmers: EU draws budget battle lines

EUR -
AED 4.320282
AFN 82.33534
ALL 97.773381
AMD 451.550673
ANG 2.105082
AOA 1078.594468
ARS 1480.274557
AUD 1.784863
AWG 2.120139
AZN 1.993687
BAM 1.96179
BBD 2.374902
BDT 143.379596
BGN 1.958127
BHD 0.443389
BIF 3446.328247
BMD 1.176221
BND 1.50282
BOB 8.127989
BRL 6.497912
BSD 1.176216
BTN 101.626856
BWP 15.697862
BYN 3.849335
BYR 23053.936395
BZD 2.362664
CAD 1.601143
CDF 3394.574289
CHF 0.933492
CLF 0.028449
CLP 1116.057406
CNY 8.421349
CNH 8.41384
COP 4751.475102
CRC 594.211724
CUC 1.176221
CUP 31.169863
CVE 110.711806
CZK 24.561841
DJF 209.038195
DKK 7.463335
DOP 71.039237
DZD 152.470809
EGP 57.740816
ERN 17.643319
ETB 160.792539
FJD 2.632621
FKP 0.870053
GBP 0.866728
GEL 3.187353
GGP 0.870053
GHS 12.262102
GIP 0.870053
GMD 84.688187
GNF 10181.370812
GTQ 9.027755
GYD 245.956182
HKD 9.233331
HNL 30.993093
HRK 7.534913
HTG 154.344526
HUF 398.423802
IDR 19144.118167
ILS 3.915252
IMP 0.870053
INR 101.57741
IQD 1540.84983
IRR 49533.582149
ISK 142.21683
JEP 0.870053
JMD 188.676067
JOD 0.833972
JPY 172.283529
KES 152.323622
KGS 102.770104
KHR 4728.409748
KMF 496.365318
KPW 1058.660322
KRW 1617.727813
KWD 0.358888
KYD 0.980189
KZT 633.010019
LAK 25365.211227
LBP 105330.611933
LKR 354.861006
LRD 236.420985
LSL 20.72526
LTL 3.473075
LVL 0.711485
LYD 6.381027
MAD 10.620068
MDL 19.889643
MGA 5210.660078
MKD 61.749321
MMK 2469.006908
MNT 4218.37094
MOP 9.509737
MRU 46.837386
MUR 53.553993
MVR 18.112834
MWK 2042.504646
MXN 21.813035
MYR 4.972479
MZN 75.231704
NAD 20.724859
NGN 1800.582757
NIO 43.225562
NOK 11.898719
NPR 162.606928
NZD 1.948338
OMR 0.452252
PAB 1.176216
PEN 4.186942
PGK 4.879848
PHP 66.706445
PKR 335.134832
PLN 4.255003
PYG 8809.898426
QAR 4.282153
RON 5.069841
RSD 117.172803
RUB 92.209061
RWF 1691.99426
SAR 4.413172
SBD 9.745105
SCR 16.637088
SDG 706.330294
SEK 11.192639
SGD 1.502223
SHP 0.924325
SLE 27.053223
SLL 24664.776032
SOS 672.179006
SRD 42.869726
STD 24345.404983
STN 24.93589
SVC 10.291553
SYP 15293.181968
SZL 20.725547
THB 37.862398
TJS 11.285798
TMT 4.128537
TND 3.384576
TOP 2.754829
TRY 47.581919
TTD 7.982338
TWD 34.428119
TZS 3031.704767
UAH 49.183194
UGX 4222.983392
USD 1.176221
UYU 47.284974
UZS 15037.988637
VES 140.516798
VND 30758.185547
VUV 141.218064
WST 3.100624
XAF 657.979933
XAG 0.02999
XAU 0.000347
XCD 3.178796
XCG 2.119763
XDR 0.816919
XOF 661.036499
XPF 119.331742
YER 283.410402
ZAR 20.628268
ZMK 10587.407014
ZMW 27.317988
ZWL 378.742761
  • CMSC

    -0.0540

    22.416

    -0.24%

  • JRI

    0.0050

    13.215

    +0.04%

  • SCS

    0.1750

    10.645

    +1.64%

  • AZN

    2.4200

    72.9

    +3.32%

  • RIO

    0.1950

    64.525

    +0.3%

  • BTI

    -0.0050

    52.215

    -0.01%

  • SCU

    0.0000

    12.72

    0%

  • GSK

    0.9350

    37.955

    +2.46%

  • BCC

    1.0900

    88.24

    +1.24%

  • BP

    0.2750

    32.795

    +0.84%

  • BCE

    0.2050

    24.585

    +0.83%

  • RBGPF

    -1.0000

    68

    -1.47%

  • RYCEF

    -0.1200

    13.3

    -0.9%

  • NGG

    -1.7700

    72.51

    -2.44%

  • RELX

    0.5100

    53.19

    +0.96%

  • CMSD

    -0.0160

    22.904

    -0.07%

  • VOD

    -0.0550

    11.265

    -0.49%

Defence, joint debt and farmers: EU draws budget battle lines
Defence, joint debt and farmers: EU draws budget battle lines / Photo: PETRAS MALUKAS - AFP/File

Defence, joint debt and farmers: EU draws budget battle lines

When the European Union unveils its long-term spending proposals next week, it will kick off the bloc's biggest budget battle in recent history.

Text size:

EU chief Ursula von der Leyen has a mammoth task on her hands: present a budget for 2028-2034 that supports farmers, helps member states ramp up their defence spending, and all while paying back the debts racked up during the covid pandemic.

The European Commission, the bloc's executive arm, will outline the proposals Wednesday, setting the stage for explosive debates with capitals and EU lawmakers over the next two years.

The previous 2021-2027 budget was worth around 1.2 trillion euros ($1.4 trillion) and made up from national contributions -- around one percent of the member states' gross national income -- and money collected by the EU such as customs duties.

The European Parliament has already made it clear it wants more money.

Von der Leyen wants the budget to address the EU's priorities: security, competitiveness and better preparing the 27-country bloc for economic shocks.

But the EU wants to achieve this while reining in ballooning public debts and deficits, and simultaneously bolstering its industries to catch up with rivals in China and the United States.

- Better EU security -

Security will be top of von der Leyen's mind as she makes the finishing touches to the budget with war still raging in Ukraine and fears among member states of a more aggressive Russia.

It is more important given the NATO military alliance last month pledged to spend significantly more on defence -- some five percent of national economic output.

There are 23 EU members in the Western military alliance.

Also under consideration is a 100-billion-euro fund to keep Ukraine afloat, but one EU official said it could change between now and Wednesday.

Von der Leyen this week vowed to support Ukraine "until 2028 and beyond, when the new European budget kicks in".

Under EU treaties, the bloc cannot spend directly on defence, but it can pour money into dual-use infrastructure like bridges that would be critical during a war.

- Supporting farmers -

The EU's common agricultural policy (CAP) -- vast farming subsidies that make up the biggest share of the budget -- will be the subject of fiery debates.

It accounts for nearly a third of the EU's current multi-year budget -- around 387 billion euros, of which 270 billion euros are directly paid to farmers.

The EU is thinking about moving away from subsidies based on farm size -- and putting a cap on how much one farm can get -- which could free up billions of euros.

"There is a growing recognition that its share in the EU budget should decline and I also expect it to decline further," said Zsolt Darvas of Bruegel think tank.

The commission is considering cutting part of the agriculture budget without touching the direct payments, but farmers have made it clear that's a red line.

"I have a tractor and I'm ready," Massimiliano Giansanti, president of Europe's influential Copa farming lobby, raising the spectre of more farmers' protests after months of demonstrations last year by disgruntled European farmers.

Farmers plan to protest Wednesday in front of the commission in Brussels as they seek to pile the pressure on the EU.

Brussels is also looking into whether CAP will keep its dedicated budget or be integrated into wider cohesion funds, with allocations left to member states to decide.

France, whose farmers are the biggest CAP beneficiary, opposes this.

- How to pay for it? -

The big question looming over everything: where will the money for all this come from?

France, Italy and others are pushing for more joint borrowing but that's a no-go for Germany, a major net contributor to the budget, as well as frugal EU states Finland, The Netherlands and Sweden.

One idea put forward has been an instrument that would allow the EU to seek grants or loans in the event of a crisis like the pandemic.

Since some states would fiercely oppose such a measure, an EU diplomat said he had seen the idea appear and disappear from draft texts shared with capitals.

Other options to raise money include a possible digital services levy as well as collecting money from taxes on small packages entering from outside the EU.

The last time the EU took on joint debt was during the pandemic, borrowing around 800 billion euros to rescue the European economy.

Except now the bloc must start paying that money back -- potentially up to 30 billion euros annually -- from 2028.

A.Wyss--NZN