World

Brussels opens Pandora’s box with €100 billion budget top-up request

Published

1 year ago

November 2, 2023

Brussels opens Pandora’s box with €100 billion budget top-up request

The European Union’s common budget is up for a review. But member states have little to no appetite for coughing up the €100 billion requested by the Commission. This is what’s at stake.

The budget for the 27-member bloc is approved for a period of seven years to guarantee long-term predictability and avoid the perennial back-and-forth between the capitals and the institutions.

Mask-clad EU leaders approved in 2020 a €1.074 trillion budget coupled with an extraordinary €750 billion plan to help member states recover from the COVID-19 pandemic following a marathon five-day summit that exposed deep rifts among member states.

But after a succession of crises, most notably a brutal war raging at the bloc’s doorstep, Brussels feels this number no longer reflects the economic reality.

That’s why the European Commission has proposed a review worth almost €100 billion, to support Ukraine, manage migration, cope with natural disasters and foster cutting-edge technologies.

“We are in a completely different world compared to 2020,” European Commission President Ursula von der Leyen said in June when she first unveiled the proposed overhaul. “This also shows in our budget – this world of multiple crises. We have been using this budget more than ever to be part of the solution (to) these crises.”

The Commission wants the top-ups to be approved before the end of the year, portraying the fresh money as a must-have to make the common budget flexible and resilient again.

Member states, however, are not buying it – at least not fully.

A meeting of the European Council in October, during which leaders did not mince words about their feelings for the proposed review, laid bare the uphill struggle that von der Leyen faces.

Cash under the mattress

Here’s what the EU executive is actually asking for:

€50 billion for the Ukraine Facility, with €33 billion in low-interest loans and €17 billion in non-repayable grants to be doled out between 2024 and 2027. The financial aid would help fill the gaps in the Ukrainian budget, sustain essential services, rebuild critical infrastructure, attract private investments and speed up key reforms.
€15 billion for migration management, including €3.5 billion for supporting Syrian refugees in Turkey and €2 billion for the Western Balkans.
€10 billion to create the Strategic Technologies for Europe Platform (STEP), a common pool of money to promote EU-made cutting-edge technologies.
€18.9 billion to repay the debt issued to bankroll the €750-billion recovery plan, which is now subject to much higher interest rates as compared to its launch in 2020.
€3 billion to reinforce the Flexibility Instrument and cope with unforeseen crises.
€1.9 billion to cover administrative costs.

Of this eye-popping €98.8 billion bill, €65.8 billion would have to be directly footed by member states. (The €33 billion in loans from the Ukraine Facility would be borrowed from the capital markets and repaid by Kyiv at a later stage.)

In the midst of an economic slowdown, steep energy prices and tighter monetary policy, the proposal has been met with suspicion and perplexity by most EU leaders.

“I think that the priorities defined by the European Commission (…) are the right ones (…) they are useful. The amount proposed today seems too high to me and therefore we have asked for a reduction,” French President Emmanuel Macron said at the October summit.

To get themselves off the hook, heads of state and governments quickly clung to the idea of re-deployment, i.e. using funds already approved but not yet spent under the 2021-2027 budget to pay for the proposed top-ups.

“For many member states, Germany included, it’s not understandable that we should always increase the budget. It is essential that we look at the available fund and how it can be reallocated or used differently,” said German Chancellor Olaf Scholz.

“What we’re saying is: reprioritise, reprioritise, reprioritise,” declared Dutch Prime Minister Mark Rutte, who famously led the “Frugal Four” coalition during the 2020 negotiations.

His Belgian counterpart, Alexander De Croo, said “What’s on the table is not acceptable for us” and warned his country might violate the bloc’s deficit rules if it were to pay up.

“It’s the (same) way the Commission looks at our budget. If we have too much deficit, they ask us to reprioritise and see if certain things can be done in a more efficient way. I think that also applies to the EU institutions,” said De Croo.

Von der Leyen conceded the final outcome would likely be a “mixture” of national contributions and redeployment but pointedly added this would result in “trade-offs” – code for programmes that could be chopped.

A non-paper drafted by Spain, which currently holds the EU Council’s presidency and moderates the talks, estimates that financing the entire review through redeployments would lead to a “general cut” of more than 30% in well-known programmes such as Erasmus+, Horizon Europe, EU4Health and humanitarian aid.

STEP things up

But it’s not all dark clouds on von der Leyen’s horizon.

Her €50-billion Ukraine Facility has received a near-unanimous warm welcome from EU leaders, who see it as a valuable tool to make the bloc’s support for the war-torn country more predictable in the long run. (And also because the Facility would make them cough up just €17 billion for the grants.)

Only Hungarian Prime Minister Viktor Orbán has publicly come out against the proposal, while Slovakia’s new premier, Robert Fico, has asked for additional safeguards to protect the cash from Ukraine’s high levels of corruption.

“The Commission wants more money so that they can give it to the integration (of migrants) and to the Ukrainians,” Orbán said. “We do not support any of them, the professional and political arguments are lacking. We will reject them.”

The other envelopes are proving to be a harder sell.

While governments agree more money for migration is required, particularly in the context of relations with countries of origin and transit, the majority has not shown a clear willingness to underwrite the €15-billion top-up.

This is worrying Southern nations whose asylum systems are often overburdened and under-resourced. During the October summit, Italian Prime Minister Giorgia Meloni told reporters that migration is “for us a priority.”

STEP, meanwhile, has ignited much less enthusiasm.

As the current budget already earmarks several initiatives for the digital transition, the appetite to add an extra €10 billion for homegrown tech is low, even if governments frequently complain about the EU’s entrenched reliance on foreign-made imports.

Portuguese Prime Minister António Costa is among the few vocal advocates for STEP, arguing having a collective pool to bankroll new tech is “important” to mitigate “asymmetries” posed by the uneven distribution of industrial subsidies, which are heavily concentrated in Germany and France, and be able to compete with the US and China.

Regarding the €19.8 billion requested to pay for interest costs, countries do not question the necessity in itself – as this is imposed externally by the capital markets – but some wonder if the money could be found somewhere else in the existing budget.

The €1.9 billion for administration appears dead on arrival. “The majority of member states reject the Commission’s proposal,” reads the non-paper of the Spanish presidency.

The budget review needs 1) the unanimous approval of all 27 member states and 2) the consent of the European Parliament. MEPs have asked for an extra €10 billion on top of the Commission’s €100-billion review, exposing the vast distance in the thinking of the three EU institutions.

Acknowledging the diverging views around the table, European Parliament President Roberta Metsola said the fraught negotiations were a “natural, traditional dilemma” for the bloc and warned against cutting popular programmes like Horizon Europe and Erasmus+ in the run-up to the EU elections in June.

“We absolutely cannot tell our citizens that, on the one hand, we’re willing not to spend anymore but, at the same time, we cannot find a solution to pay because we are, let’s say, over-extended in terms of our debt,” Metsola said after taking part in the October summit.

“I don’t see a way out yet.”

Related Topics:Emmanuel Macron EU Budget European Commission European Union Featured Olaf Scholz Ursula von der Leyen

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World

Saudi executions rose sharply in 2024

Published

6 hours ago

December 26, 2024

Press Room

Saudi Arabia executed 330 people this year, the highest number in decades, despite de facto ruler Mohammed bin Salman’s 2022 assertion that the death penalty had been eliminated except for murder cases under his vision for a new open kingdom.

World

Israel launches strikes in Yemen on Houthi military targets, IDF says

Published

6 hours ago

December 26, 2024

Press Room

Israel launches strikes in Yemen on Houthi military targets, IDF says

The Israeli military claimed responsibility for a series of airstrikes in Yemen on Thursday that hit Sana’a International Airport and other targets in the Houthi-controlled capital.

The Israel Defense Forces said the strikes targeted military infrastructure used by the Houthis to conduct acts of terrorism.

“The Houthi terrorist regime has repeatedly attacked the State of Israel and its citizens, including in UAV and surface-to-surface missile attacks on Israeli territory,” the IDF said in a statement.

“The targets that were struck by the IDF include military infrastructure used by the Houthi terrorist regime for its military activities in both the Sana’a International Airport and the Hezyaz and Ras Kanatib power stations. In addition, the IDF struck military infrastructure in the Al-Hudaydah, Salif, and Ras Kanatib ports on the western coast.”

PROJECTILE FROM YEMEN STRIKES NEAR TEL AVIV, INJURING MORE THAN A DOZEN: OFFICIALS

Black smoke rises near Sana’a International Airport in Yemen after reported Israeli airstrikes. (Reuters)

The strikes come days after Israel’s defense minister promised retaliation against Houthi leaders for missile strikes launched at Israel from Yemen.

Houthi rebels, who control most of northern Yemen, have fired upon Israel for more than a year to support Hamas terrorists at war with the Jewish State. The Houthis have attempted to enforce an embargo on Israel by launching missiles and drones at cargo vessels crossing the Red Sea – a major shipping lane for international trade.

US NAVY SHIPS REPEL ATTACK FROM HOUTHIS IN GULF OF ADEN

This photo released by the European Union’s Operation Aspides naval force shows the oil tanker Sounion burning in the Red Sea following a series of attacks by Yemen’s Houthi rebels, on Saturday Sept. 14, 2024. (European Union’s Operation Aspides via AP)

Overall, the Houthis have launched over 200 missiles and 170 drones at Israel since Hamas’s Oct. 7, 2023, massacre of 1,200 people. Since then, the Houthis have also attacked more than six dozen commercial vessels – particularly in the Bab-el-Mandeb, the southern maritime gateway to Egypt’s Suez Canal.

On Saturday, a projectile launched into Israel from Yemen struck Tel Aviv and caused mild injuries to 16 people, Israeli officials said. The incident was a rare occasion where Israeli defense systems failed to intercept an attack.

NETANYAHU WARNS HOUTHIS AMID CALLS FOR ISREAL TO WIPE OUT TERROR LEADERSHIP AS IT DID WITH NASRALLAH, SINWAR

Israeli Defense Minister Israel Katz looks on, amid the ongoing conflict in Gaza between Israel and Hamas, in Jerusalem, November 7, 2024. (REUTERS/Ronen Zvulun)

Israel retaliated by striking multiple targets in areas of Yemen under Houthi control, including power plants in Sana’a.

Israeli leaders have vowed to eliminate Houthi leadership if the missile and drone attacks do not cease.

On Monday, Israeli Defense Minister Israel Katz said, “We will strike their strategic infrastructure and decapitate their leaders. Just as we did to [former Hamas chief Ismail] Haniyeh, Sinwar and Nasrallah, in Tehran, Gaza and Lebanon – we will do in Hodeidah and Sanaa.”

Prime Minister Benjamin Netanyahu has also urged Israelis to be “patient” and suggested that soon the military will ramp up its campaign against the Houthis.

“We will take forceful, determined and sophisticated action. Even if it takes time, the result will be the same,” he said. “Just as we have acted forcefully against the terror arms of Iran’s axis of evil, so too will we act against the Houthis.”

Fox News Digital’s Amelie Botbol contributed to this report.

Chris Pandolfo is a breaking news reporter for Fox News Digital. Send tips to chris.pandolfo@fox.com and follow him on Twitter @ChrisCPandolfo.

World

Retraction of US-backed Gaza famine report draws anger, scrutiny

Published

7 hours ago

December 26, 2024

Press Room

Retraction of US-backed Gaza famine report draws anger, scrutiny

United States President Joe Biden’s administration is facing criticism after a US-backed report on famine in the Gaza Strip was retracted this week, drawing accusations of political interference and pro-Israel bias.

The report by the Famine Early Warning Systems Network (FEWS NET), which provides information about global food insecurity, had warned that a “famine scenario” was unfolding in northern Gaza during Israel’s war on the territory.

A note on the FEWS NET website, viewed by Al Jazeera on Thursday, said the group’s “December 23 Alert is under further review and is expected to be re-released with updated data and analysis in January”.

The Associated Press news agency, quoting unnamed American officials, said the US asked for the report to be retracted. FEWS NET is funded by the US Agency for International Development (USAID).

USAID did not immediately respond to Al Jazeera’s request for comment on Thursday afternoon.

Israel’s war in Gaza has killed more than 45,300 Palestinians since early October 2023 and plunged the coastal enclave into a dire humanitarian crisis as access to food, water, medicine and other supplies is severely curtailed.

An Israeli military offensive in the northern part of the territory has drawn particular concern in recent months with experts warning in November of a “strong likelihood” that famine was imminent in the area.

“Starvation, malnutrition, and excess mortality due to malnutrition and disease, are rapidly increasing” in northern Gaza, the Integrated Food Security Phase Classification said in an alert on November 8.

“Famine thresholds may have already been crossed or else will be in the near future,” it said.

The report

The FEWS NET report dated December 23 noted that Israel has maintained a “near-total blockade of humanitarian and commercial food supplies to besieged areas” of northern Gaza for nearly 80 days.

That includes the Jabalia, Beit Lahiya and Beit Hanoon areas, where rights groups have estimated thousands of Palestinians are trapped.

“Based on the collapse of the food system and worsening access to water, sanitation, and health services in these areas … it is highly likely that the food consumption and acute malnutrition thresholds for Famine (IPC Phase 5) have now been surpassed in North Gaza Governorate,” the FEWS NET report had said.

The network added that without a change to Israeli policy on food supplies entering the area, it expected that two to 15 people would die per day from January to March at least, which would surpass the “famine threshold”.

The report had spurred public criticism from the US ambassador to Israel, Jack Lew, who in a statement on Tuesday said FEWS NET had relied on “outdated and inaccurate” data.

Lew disputed the number of civilians believed to be living in northern Gaza, saying the civilian population was “in the range of 7,000-15,000, not 65,000-75,000 which is the basis of this report”.

“At a time when inaccurate information is causing confusion and accusations, it is irresponsible to issue a report like this,” he said.

pic.twitter.com/f9rxgHdVPm
— Ambassador Jack Lew (@USAmbIsrael) December 24, 2024

‘Bullying’

But Palestinian rights advocates condemned the ambassador’s remarks. Some accused Lew of appearing to welcome the forced displacement of Palestinians in Gaza.

“To reject a report on starvation in northern Gaza by appearing to boast about the fact that it has been successfully ethnically cleansed of its native population is just the latest example of Biden administration officials supporting, enabling and excusing Israel’s clear and open campaign of genocide in Gaza,” the Council on American-Islamic Relations said in a statement.

The group urged FEWS NET “not to submit to the bullying of genocide supporters”.

Huwaida Arraf, a prominent Palestinian American human rights lawyer, also criticised Lew for “relying on Israeli sources instead of your own experts”.

“Do you work for Israel or the American people, the overwhelming majority of whom disapprove of US support for this genocide?” she wrote on X.

Polls over the past year have shown a high percentage of Americans are opposed to Israel’s offensive in Gaza and want an end to the war.

A March survey by Gallup found that 55 percent of people in the US disapproved of Israel’s actions in Gaza while a more recent poll by the Pew Research Center, released in October, suggested about three in 10 Americans believed Israel’s military offensive is “going too far”.

While the Biden administration has said it is pushing for a ceasefire in Gaza, it has rebuffed calls to condition US assistance to Israel as a way to bring the war to an end.

Washington gives its ally at least $3.8bn in military assistance annually, and researchers at Brown University recently estimated that the Biden administration provided an additional $17.9bn to Israel since the start of the Gaza war.

The US is required under its own laws to suspend military assistance to a country if that country restricts the delivery of American-backed humanitarian aid, but Biden’s administration has so far refused to apply that rule to Israel.

“We, at this time, have not made an assessment that the Israelis are in violation of US law,” Department of State spokesperson Vedant Patel told reporters in November despite the reports of “imminent” famine in northern Gaza.