Emmanuel Macron has been loudly calling for member states to the pour more cash into the coffers although has kept France’s planned contribution close to his chest. Wealthier EU nations are urging prudence amid fears they will be leaned upon to fill a £63bn shortfall caused by Britain’s departure from the bloc and want their contributions capped at 1 percent of gross national income (GNI).
We can’t just be part of a system where we write cheques to each other, as Margaret Thatcher used to say
Mr Macron also wants to see EU rebates scrapped in a post-Brexit shake-up while fellow net-contributors are keen to keep hold of the complex mechanism of cash transfers to and from Brussels.
Rebates will pose one of the biggest political hurdles faced by European Council boss Charles Michel as he tried to find support for his “miracle budget”.
Britain’s rebate, the partial refund for their payments into the EU budget secured by Margaret Tatcher in the 1980s, obviously disappears with Brexit.
Emmanuel Macron wants to scrap EU rebates
Germany, the Netherlands, Austria, Denmark and Sweden, which are all net contributors, have their own rebates and want to keep them.
But Mr Macron and at least 16 other member states are arguing that with the UK rebate gone, all rebates should be gone.
Mr Michel proposed to keep a lump-sum as a correction for these countries, whose EU contributions will increase because of Brexit, but which should “degress” over the next seven years.
European Council boss Charles Michel is trying to push through his ‘miracle budget’
Emmanuel Macron is at odds with the leaders of the EU wealthier member states
Specific figures will only be part of the negotiations but according to some calculations, £12.13bn could be saved if rebates were scrapped.
One senior EU official said: “Frugal countries obviously can’t have both 1.0 percent and rebates.”
The mood in Paris is even more confrontational with officials saying Mr Macron wanted to scrap the rebates as “the current financing system is archaic, unjust and illegible”.
EU leaders are holding crunch budget talks in Brussels today
French EU Affairs Minister Amélie de Montchalin said: “We go with the president in these debates in a fairly offensive manner — we will not accept an agreement that would cut Europe off.
“France is not ready to put more money on the table to indefinitely give it to its neighbours.
“We can’t just be part of a system where we write cheques to each other, as Margaret Thatcher used to say.”
Mr Macron has made a habit of speaking last at EU summits and then throwing the cat among the pigeons as he did when he opposed a long extension of the Brexit deadline last year and again in the autumn when he led an effort to block the start of accession talks with Albania and North Macedonia.
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A Paris official said: “We know that the positions are harder to reconcile this time around than the last time.
”We will put all this in the shaker, and I can’t tell you what taste the cocktail will have, whether it will be drinkable in one go, but it’s the objective and it won’t be easier to reach an agreement in three months.
“It would be a good collective signal to send by reaching an agreement now and being able to work on other issues moving forward, like the future relationship with the UK.
“We are ready to make compromises to reach a deal quickly instead of having multiple summits that drag on with complicated battles for the next few months.”
The EU budget gets money from customs duties on goods entering its single market, a cut of sales tax, antitrust fines imposed by the EU on companies, and from national contributions.
It spends money on subsidies for EU farmers, on equalising living standards across the bloc, border management, research, security and various non-EU aid programs.