“The Brussels Diary with Yana Toom”: Budget for Twenty Seven Kingdoms


Once upon a time, there was a fantasy country not of seven kingdoms, like in Game of Thrones, but of twenty-seven kingdoms. Before there were twenty-eight kingdoms; however, one island kingdom left: you know, we have better dragons than you have, and we will not put our pot of gold into the common pot. The rest decided, to hell with you, and got on with their lives.

This country had a custom: every seven years the kings and queens had a meeting to negotiate on what to spend the gold from the common pot. Alas, some gold escaped; the pot had a hole in it. The leaders of the kingdoms came together and then divided into two camps. The rich demanded that all should cover the shortfall. The poor said that they agreed on solidarity; meaning that those who had more gold should put more into the pot.

So, there was a fallout. To the delight of the island kingdom. At that, this fairy tale actually ends...

As they say – no point expecting it.

Yes, the summit on the seven-year budget was a failure, to put it mildly. Austria, Denmark, Sweden and the Netherlands would not budge: the budget should be one per cent from the ЕU gross national income – and not one more decimal place.

The friends of cohesion – seventeen countries, including Estonia – confront the frugals. Their proposal is one point one per cent. Some insist on one point one six per cent and even one point three per cent. The difference in the share is enormous: the budget is a trillion euros and one tenth of one per cent is a billion.

While the friends of cohesion are willing to come to a reasonable compromise, the frugal countries are not willing. Prime Minister of the Netherlands Mark Rutte was especially noticeable: he took the biography of Chopin with him to the summit and, according to him, he looked up from the book only to say ‘no’ one more time.

However, this is all not that simple.

First, the budget is approved by the European Parliament and the Parliament will not give its approval if the frugals do not make concessions.

Second, the firm stance of Rutte and others is intended to influence the public: look, voters, we are fighting for your interests! Everybody understands that an agreement is necessary. Even the most ardent fighters of the two sides will not break up the EU for a budget.

Third, the main players distanced themselves from both camps. Merkel said Rutte᾿s behaviour was childish and Macron was annoyed that the EU countries have divided into ‘clubs’. France and Germany do not take sides and are getting tired of all this.

These two camps are not uniform. All the countries have their own interests. A source of the newspaper Politico shared their observation: Chancellor of Austria Sebastian Kurtz indisputably takes the side of frugality, but during the negotiations he had an unpleasant surprise – he and Rutte seem to fight for the same cause, but the Netherlands will gain more than Austria.

There is no way out without an agreement. The next summit will be held in March. Currently, hard work is going on in the palaces: the kings and the queens are trying to find a path to a compromise. Most important is not to mess things up. Yes, Estonia has been promised many millions from the Just Transition Fund for green economy. Nevertheless, there is an intention to take 11% of funds from the regions and 12% from agriculture. However, Ida-Viru County is about regional politics, farmers᾿ tractors operate on petrol and cows produce methane, a greenhouse gas. So, all of the above must be taken into account.

Europe not only needs a compromise on the budget, but a smart budget.

See you in a week!