Insights from Brussels - Argument about trillions
The autumn drama in the EU is the fight over the money in the union's long-term budget. The fight over the trillions will also be felt in Norway.
At the end of August, the leaders of six EU countries met in Berlin to coordinate their opposition to the budget proposals that the European Commission and Parliament have been hammering out in Brussels. Known as the “frugal ones,” Germany, Austria, the Netherlands and the three Nordic members agree that spending in the EU must be drastically reduced. Or rather: the increase that the EU institutions have proposed must be drastically reduced. Everyone agrees that the EU must take on new and costly tasks, especially related to defense and security. The six rich EU countries, which will have to foot much of the bill, will reduce costs by cutting more traditional EU spending such as agriculture and regional aid. Predictably, such proposals meet strong resistance from countries in the south and east that are recipients of such transfers from Brussels.
Despite the great differences, EU countries are in a hurry. On the calendar for 2027 are a number of national elections that could be decisive for the direction of the Union in the years to come. The most important of these is the French presidential election in April. A series of recent opinion polls show that Marine Le Pen is currently on track to beat all possible opponents in the second round of the election. Le Pen in the Élysée Palace is a scenario that strikes fear in the EU, since she has promised to cut French contributions, put the brakes on the green transition and renegotiate treaties to bring power back to Paris. There is therefore a strong desire to get the framework for the long-term budget in place before the French elections. The combination of a lot of disagreement and little time will make for some intense and interesting political months in the EU.
At the forefront of the fight against the Commission's budget proposal is German Chancellor Friedrich Merz. Germany alone accounts for up to a quarter of the financing of the EU budget. The fact that it is his Christian Democratic party colleague from the same country, Ursula von der Leyen, who is fronting the proposal does not dampen the demands for cuts. Merz went to Dublin this summer to clarify his positions for the Irish presidency. Ireland will try to steer the process ashore, map red lines in various corners of the Union and find possible compromises. The Chancellor's message was that several hundred billion euros must be cut from the Commission's desired budget. Merz also wants nothing to do with the EU institutions planning to create 2,500 new positions.
The long-term budget will cover the period 2028-2034, and the Commission's proposal was for around two trillion euros in spending for the entire period. The sum is of course large, but it is still in the national budgets that most public euros in Europe are spent. In fact, the EU's annual spending is comparable to Denmark's state budget, and less than Norway's. The increases that the Commission and Parliament want are still far in the future. This is partly due to the tightening of state finances in many member states, and partly due to political pressure from the far right. Accepting a larger EU budget is especially difficult for Merz after the AfD's victory in the state elections in Saxony-Anhalt and the party's strong figures in national opinion polls.
Faced with these constraints, many EU leaders are looking for creative solutions. In her State of the European Union speech this week, Von der Leyen stated that the EU needs “own resources” in its budget. Own resources mean taxes and levies that can go directly to the EU. The Commission has proposed several of these, but appears to have given the thumbs down to both a tax on large transnational corporations and a tobacco tax. By contrast, revenues from a carbon tax and a levy on e-waste could survive in the final budget .
What does this mean for Western Norway and Norway? When the long-term budget is in place, the framework for a number of cooperation projects in which Norway participates will also be determined. The Commission believes that the current EU budget is too fragmented, and wants larger programs that can be more easily used strategically. Here too, there is disagreement, both about the number of programs, themes and what should be decided by the Commission and the member states. The more the programs are merged into large collective items, the more expensive the entrance fee will be for Norway. Over the past year, the government has been collecting input, before it must notify the EU in early 2027 about which programs Norway wants to participate in. There may therefore also be considerable tug-of-war in Norwegian politics. If not about trillions, then about a large number of billions.
PS:
See the summary from VNB on the Commission's original proposal for a long-term budget and program structure here . This summer, the Ministry of Education and Research received an evaluation of Norway's participation in the EU Framework Program for Research and Innovation, which can be found here .