Pay more or get less, EU leaders told at summit as they debate bloc's budget

Officials attend a lunch during an informal meeting of the 27 EU heads of state or government in Brussels on Feb 23, 2018.
Officials attend a lunch during an informal meeting of the 27 EU heads of state or government in Brussels on Feb 23, 2018.PHOTO: AFP

BRUSSELS (AFP) - European Union leaders faced calls at a Brussels summit on Friday (Feb 23) to "pay more" to fill a Brexit-sized hole in their budget or accept cuts.

The 27 leaders minus Britain were also debating how to choose a new European Commission chief next year to replace Jean-Claude Juncker.

But the key argument was over how they will deal with a gap of up to €15 billion (S$24.3 billion) a year in the bloc's multi-year budget from 2020.

"I do think that if we want to have new priorities, and we can't reduce to the right extent old policies, then countries have to pay more," said Juncker.

Grand plans pushed by French President Emmanuel Macron to reboot the EU after Britain leaves in 2019 are colliding with issues of cold hard cash and sovereignty for the first time at the summit.

EU President Donald Tusk is to ask leaders on Friday whether they are ready to pay more, and to urge them to focus on defence, education and migration. No formal decisions will be taken.

Juncker's commission, the powerful executive arm of the EU, has called for an increase in spending of between 1.1 per cent and 1.2 per cent on the current trillion-euro 2014-2020 budget.

But the Netherlands, Denmark, Sweden and Austria, which all pay more into the EU budget than they get out, are strongly opposed to increasing EU spending.

"What we don't want is the weight of a constant increase in spending pressing down on net contributors," Austrian Chancellor Sebastian Kurz said as he arrived.

Dutch Prime Minister Mark Rutte said that "by modernising the budget we can free up money for new priorities" including defence and cybersecurity.

The commission has suggested cuts to agricultural funds, which is sure to anger major producer France, and payments to poorer regions, which Eastern European states will oppose.

Leaders will also discuss whether to make the so-called cohesion payments to poorer areas conditional on countries obeying the rule of law, and on accepting refugees.

Both of those proposals will go down badly with Poland, which is currently at odds with Brussels over controversial reforms to its legal system, and other eastern states that refuse to take in asylum seekers.

Tusk will say it is "unrealistic" to expect any agreement on the budget before the 2019 European elections, pointing out that last time it took 29 months.

Meanwhile, leaders will debate changes to the European Parliament after Brexit, and in particular how closely the parliament is involved in choosing the next head of the European Commission in 2019.

In 2014, Juncker was chosen by the so-called "Spitzenkandidat" - German for "lead candidate" - system, under which the biggest party in the European Parliament names its choice for commission chief.

The European Parliament wants the same to happen after the next European elections in 2019, but with a guarantee that its candidate will be chosen.

"We are for it because we must reinforce democracy in Europe," European Parliament chief Antonio Tajani told a news conference.

But most national leaders believe that they, and not MEPs, must have the final say, according to officials. They view it as a power grab by the parliament at the expense of national sovereignty.

"There cannot be, and will not be, a guarantee," a senior EU official said.

British Prime Minister Theresa May is excluded from the meeting in Brussels, the latest in a series of special EU summits aimed at charting a roadmap following Britain's shock 2016 vote to quit the bloc.

Tusk will tell leaders on Friday that he expects to go ahead as planned at a summit in March and issue Brexit negotiating guidelines on the future EU-Britain relationship, officials said.

May will finally unveil her vision for future EU ties next week, London said, after she chaired an eight-hour Cabinet meeting at her country retreat on Thursday (Feb 22) to thrash out a plan.

Juncker quipped when asked for his thoughts about the meeting that "I am not the British prime minister, it would be good for Britain if I was."