EU Leaders to Wrangle Over Spending

EU Leaders to Wrangle Over Spending

BRUSSELS (AP) -- Everything is set for the EU's bruising trillion-euro summit.

Leaders from the European Union's 27 countries are flying in to Brussels on Thursday to discuss the bloc's spending plan for the next seven years now that Britain has left.

Diplomats and number crunchers have been working on the budget for years but the issues are so divisive that the leaders' summit might last into Saturday and still end without a result.

The EU nations need to regroup after Britain's departure three weeks ago, and a show of unity on their common budget could help in that regard. Forget it.

Britain's exit means the loss of up to 75 billions euros ($81 billion) in net contributions to the budget, and how to make up for that is causing friction. Leaders of rich nations don't want to have to pay more into that common EU pot, and those from poorer member states are angry at the prospect of receiving less money from the EU.

Even if a trillion euros ($1.1 trillion) sounds like a lot, it actually amounts to about 1% of the gross national income of the 27 nations combined. The debate is over some 0.3 percentage points.

Even German Chancellor Angela Merkel, who is usually cautious in her remarks, said bluntly that for her country, the EU's biggest, "in many places our concerns have not yet been sufficiently taken into account."

It's not just about convincing reluctant member countries to stump up funds. The European Parliament must also ratify any final budget agreement and the EU lawmakers are not happy.

"At the moment, we remain 230 billion euros ($248 billion) apart," European Parliament President David Sassoli said this week.

After a series of one-to-one meetings with national leaders in recent weeks, with some lasting three hours, European Council President Charles Michel proposed last Friday to set the budget at 1.074% of EU gross national income. The parliament wants 1.3%, while the EU's powerful executive arm, the European Commission, prefers 1.11%.

Ahead of the negotiations, the 27 member nations are roughly divided into two main camps. The so-called "Frugal Four" of Austria, Denmark, the Netherlands and Sweden versus the "Friends of Cohesion," a group of mainly central and eastern European nations who want to see the continued flow of "cohesion funds," money earmarked to help develop poorer regions.

Ahead of the summit, the frugal four, who would like the budget to drop to as low as 1% of gross national income, rejected Michel's offer in a Financial Times newspaper op-ed, saying that in light of Brexit "we simply have to cut our coat according to our cloth."

Complicating things further is the level of global uncertainty beyond the continent. While climate change was largely a technical matter during the last budget negotiations seven years ago, this time the EU is planning to spend a quarter of its budget on green issues.

Add that to the many other, varied issues the budget will cover - like agriculture, education and transport - and it makes for a difficult summit.