Press conference on the MFF - Presidency events
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Council of the European Union European Council
Follow its sittingsThomas Byrne
And this increased volume reflects a commitment to greatly raise the level of the ambition of the EU budget in the next seven-year cycle. I want to underline that almost every program in the budget receives an increase in our negotiating box when you compare it with the current MFF. We have made revisions in the form of adjustments and savings that reflect the clear priorities of member states on each program. This preserves the ambition to meet a new the the new and emerging policy priorities of our modern budget, while at the same time supporting core policies like the common agricultural policy and cohesion. I will not outline every change made in the negotiating box here today and there will be a technical briefing afterwards.
But I want to focus on the issues which are of most significance and importance to member states.
First, we have preserved the national allocations as they were amended by the Cyprus presidency. The Irish presidency revised negotiating box responds to the calls of the majority of member states to protect the common agricultural policy and to protect cohesion as essential treaty-based EU policies. This includes the rural target and the option of flexibility front-loading of the common agricultural policy. Secondly, the new MFF must respond to Europe's new and emerging needs. At the core of the next MFF must be a bold focus on competitiveness, research, innovation, security and defense.
That's why our negotiating box maintains a level of ambition in these priorities that is unprecedented in any long-term budget. Importantly, our negotiating box presents a package of European competitiveness funds totaling more than 400 billion euro. This revision sees the competitiveness heading heading more than double compared to the current MFF.
It's an unmistakable signal of our determination to supercharge investment in Europe's future competitiveness and to support European prosperity and job creation into the future. Thirdly, given the overwhelming position of nearly all member states, recovery and reconstruction funds for Ukraine are retained in the proposal, as is our commitment to the 25 billion euro humanitarian assistance ring-fenced amount. Our challenge was to deliver on all these ambitions while moderating the increase set out in the Commission's proposals. As such, under heading one, which is economic, social and territorial cohesion, agriculture, fisheries and rural communities, that's proposed at 914 billion euro, which is an 11% increase on the current MFF and a 3% saving on the Commission proposal. Heading two, which is competitiveness, prosperity and security, is proposed at 456 billion euro.
That's 106% increase on the current MFF and a 13% saving on the Commission proposal. Heading three, Global Europe, is proposed at 157 billion euro, a 31% increase from the current MFF and a 17% saving on the Commission proposal. Heading four, administration, is proposed at 95 billion euro, which is a 12% increase from the current MFF and an 8.8% saving on the Commission proposal.
I am confident that this revision to the overall volume and the rebalancing of priorities, that it acts to address the preferences of member states and it will open the door to the next stage of negotiations. Each heading under this negotiating box offers increased flexibility throughout the proposal. And that's in response to a clear call from member states for a simplified and more flexible modern multiannual financial framework. On own resources, the Irish presidency has proposed a significant and ambitious package which is capable of raising 55 billion euro each year. This will help in stabilizing contributions while meeting the many expectations in the EU budget.
We committed to advancing this stream of work and we believe our proposal will help build support for the package among member states. We have made two significant changes. First, we propose an increased call rate for the CBAM new own resource from 75% to 90%. This reflects our assessment of how we can best augment the proposed package in line with member state preferences. Secondly, we've heard the clear concerns of many member states who are most affected by the proposed ETS own resource.
We recognize that ETS can provide a revenue stream that can support the EU budget while also assisting decarbonization goals, but I think we have to do this in a way that brings member states on the journey.
So we're therefore proposing a progressive phase-in approach. Over the course of the seven-year cycle, this will address the concerns of member states on the regressive effects of the proposal. Our goal in making this adjustment is to solidify the case for an ETS own resource that every member state can live with. So today marks a significant step in the MFF negotiating process, but it's not the final agreement. The Irish presidency has worked to facilitate consensus and to provide a realistic foundation for leaders' discussions on the MFF.
In the coming week, member states will have the opportunity to regroup and discuss the next steps, including at Coreper, at the General Affairs Council, at leaders' level then at the upcoming European Council. We will continue to work closely with the President of the European Council, Antonio Costa, and his team to move to the next phase of the process with a view to supporting agreement by leaders before the end of the year.
Fundamentally, the EU budget is about delivering for people today and into the future. When it is finalized, I am confident that the next EU budget will be a testament to our ability to look beyond domestic positions, to work collectively to advance our shared objectives, and to do this for the benefit of all citizens and communities within our borders and to those we support further afield. Thank you, and I'm happy to answer questions.
Owen
Okay, thank you, Minister, and we'll open up for questions, and I'll first go to Suzanne, please.
Suzanne Lynch
Hi there, Suzanne Lynch from Bloomberg. Minister, this new proposed budget for the next seven years through 2034 represents a huge increase from the last budget, 30% not accounting inflation, almost 50% accounting for inflation. How do you justify this at a time when countries across Europe are, as we speak, trying to get budgets through, there are protests in some countries about the scale of some of those real-world expenditures that are going to hit them? How do you justify such a big figure at this time, and also when financial markets have raised concerns over the last couple of weeks about the fiscal situation in some member states?
Thomas Byrne
I don't have a mic... oh, I have a mic, sorry.
Look, the negotiating box, it's a subject of it's a product really of intense discussions between member states. I've conducted them bilaterally with my counterparts or Ambassador, the Taoiseach, other ministers as well. And we've listened carefully to all member states as to what they want and how we best respond to the needs of our peoples and our communities. And you know, on heading one, on agricultural cohesion and the other matters that are in heading one, there was a strong support there. There's obviously very strong voices as well to look to the future in heading in heading two, for example.
So our view is that we we protected to the extent that member states wished the traditional policies of the Union, which are very, very important for the European Union of the single market, but we also very much look to the future to make the European Union much more economically resilient, to increase economic activity, to increase prosperity, to increase jobs for European citizens in in in the competitiveness fund. And this this this is what we're doing.
And I think, you know, I'm not sure what the impact on financial markets would be of this, but an agreement by European leaders to have an MFF for the next seven years provides the certainty that we all know the financial markets value more than anything and also provides a basis, I think, for economic growth across the Union for the period ahead.
Speaker 5
Thank you, Sophie Dupuy for Context. One question on the revenue side. So you say there was this tasking from the President of the European Council to move the negotiation forward on this part of the MFF. The PEC was asking you also to consider the three proposals from the Parliament. Why did you decide not to include them?
And can you guarantee that the Irish presidency was an honest broker, including on the digital levy that was proposed by the Parliament? Thank you.
Thomas Byrne
We have maintained the Commission proposals and we've amended some of them to reflect what the member states told us and we have, I think, put forward a very ambitious package of new own resources. This will allow the leaders to have a full discussion on new own resources because I think almost everybody accepts that they are necessary.
We have very specifically stated in the negotiating box that the discussions can continue on own resources. So that is a process I think that will continue not just in the next phase of negotiations under the PEC but also into the future as well. That's very specifically stated by us. In relation to the Parliament's proposals, we had three tests for new own resources: one, that they command unanimity; two, that they can deliver substantial funds; and three, that they'd be ready by the 1st of January 2028. It wasn't clear to us either on the funds question or that they could be deliverable on the 1st of January 2028.
However, the negotiating box very specifically provides that the discussions can continue forward on new own resources, including ones that are not specified in the negotiating box itself.
Mark Beebecorn
Thanks, good morning, Mark Beebecorn, Voskan Netherlands. Because you stressed the fact that this is a balanced proposal, can you tell me what the balance is if you cut on heading two and three about four, five times as much as on heading four?
Thomas Byrne
Well, there are very significant proposals in heading two and three, I should say. I mean, heading two has over a 100% increase on the current proposal, on the current MFF, and heading three is a 31% increase on the current MFF. We listened to each and every one of the member states, and there was strong support for heading one from almost all of the member states, including some of the countries who would be considered to be net contributors to the MFF. So we've had to balance all of the competing demands from the member states. We've listened carefully to what they all say, and we have said, well, the member states are telling us this, and this is how we see the balance.
So we very much see this as a balanced proposal in terms of what the member states are telling us and in terms of where our priorities should be. Yes, a huge number of member states wanted us to maintain what was there in relation to heading one, but also member states almost uniformly as well wanted to see significant ambition in heading two and indeed in heading three as well. And I think our negotiating box and the figures that are there certainly exemplify that.
Victoria
Sorry, Victoria, for Rapporteur. Thank you very much. You said you believe this is closer to a landing zone.
I'm sure it's a lot of hard work that went into this. The reactions are trickling in. It's not overwhelming excitement. So I'm wondering what do you expect from next week? Deal by Christmas?
Thomas Byrne
I certainly hope that there will be a deal by Christmas for the reasons that we've long set out, that if we want citizens and the European economy to benefit from this multiannual financial framework on the 1st of January 2028, then we have to get agreement before Christmas. So that is why we've long ago set our target as before the European Council. We stuck very rigidly to that target. We met everybody over the summer and in the last few weeks to see where we could get to. And this is now, I suspect, will be the basis for the negotiation to continue with a view to getting agreement concluded by the leaders at the end of the year.
Nobody's going to get everything that they wanted in any proposal, but we think that there's something there for all of the member states and there's something there for all of our European citizens as well.
Jonathan Packroff
Yeah, thanks, Jonathan Packroff for Table Briefings, just following up on that. You said you listened to everyone and there's something in for everyone, but you dealt with two major groups, the Friends of Cohesion and the kind of net contributors. The Friends of Cohesion, they got the cohesion even increased and almost no cuts in agriculture, but on the other side, the net contributors, they didn't get the several hundred billion in cuts that they were demanding. So what is in it for them and what do you have to offer for them to come to an agreement? Thanks.
Thomas Byrne
I think we have achieved very significant savings in this proposal that we've put forward of 141 billion euro, which is 8%. That's a very significant saving on the proposal. We hope that this will be a catalyst to reaching the final agreement among leaders, that this will be the basis for further negotiations. This isn't the end of the process, but this is a major step on the way to the process. And we've worked really, really hard to balance all of the views of all of the member states in relation to this proposal, and we think we've found that balance, but the discussions will continue at the leader level, and that is how it should be.
David Carretta
Thank you. David Carretta, Radio Radicale, Italian Radio. I would dare to ask a political question because I totally understand the proposal, the compromise. But what is the message that you are sending to people, normal people and the world? Basically, the realist can be happy with 8% cuts, but the modernizer will not be happy because you are cutting the future investment, the investment for the future in Europe, preserving traditional policies.
At the same time, you are cutting quite a lot the proposal of the Commission for Global Europe, and the situation in the world is quite upsetting, I would say.
So, I would like to know from your perspective, what is the political message that my kids should get from your proposal? Thank you.
Thomas Byrne
Well, it's a modern, flexible budget that invests very heavily in the new priorities, which is designed to strengthen the European economy and provide prosperity and jobs to European citizens through the competitiveness fund, through all the funds that are there in heading two. In relation to young people, I think there's a very significant proposal in relation to Erasmus and again, all of the competitiveness fund as well is about innovation, it's about research and development, it's about how we move the economy forward and how we make sure that Europe is that global player from an economic point of view. But we also protect treaty-based policies because if your children are farmers or if your children live in poorer areas of the European Union, they want to see those policies protected. And that's the message that we've got from member states. We've recognized, we hope that we've recognized the fiscal realities that all member states are facing, but we really believe this is a citizens-focused MFF that will bring benefits to the European economy and to European citizens in the period of the seven years.
Jan Diesteldorf
Thanks, thanks for taking my question. Jan Diesteldorf with Süddeutsche Zeitung. Mr. Byrne, your negotiating box, you said it yourself, we've already discussed it, largely protects the core allocations for the Common Agricultural Policy and cohesion policy, while at the same time imposing substantial cuts on competitiveness, research, infrastructure, and external action. Given the size of the CAP and cohesion envelopes, did you really not see, even after discussions with member states, a scope for more cuts? And then isn't this in effect asking Europe to meet its new challenges by cutting the programs that are supposed to make it more competitive and secure, while leaving the largest spending envelopes largely untouched?
Thomas Byrne
Well, a significant majority of member states, and a very strong majority of member states, wanted to see the national allocations that the Cyprus presidency proposed, they wanted that retained in any revision. That's what the member states told us. There were others, of course, who wanted to see the competitiveness funds prioritized, and particularly those related to security and defense, connectivity, etc. And there were some who wanted both, actually, if we're honest about it.
Nearly all member states were clear in their commitment for support for Ukraine. And while it was clear that I think everybody accepted that all headings, we believe it's necessary that all headings provide savings. There's a general consensus that the general consensus that we got when we listened to the member states is as best we can reflected in the negoboxes there. And it's not true to say there are cuts to heading two. There are reductions on the proposals that the Commission put forward, but it's still a more than doubling of spending in that area compared to what was done under the previous MFF.
So that's very, very significant. And I think that that sometimes gets forgotten in this debate that when we talk about cuts, and indeed a letter from the contributor countries said as much, when we, you know, there are still increases to the MFF and a very, very significant increase in heading two. But on heading one and the national plans, we're simply reflecting what a large majority of member states said to us, including some contributor states.
Gregorio Sorgi
Hello, good morning. This is Gregorio Sorge from Politico. I have a question on own resources because you said that one of the criteria is that the own resources need to have unanimity.
And I think it's clear to everyone that CORE doesn't even come close to having unanimity in the Council. So could you enlighten us why you've kept CORE as part of the package despite all the criticism that we've seen from member states? And also why you have proposed no changes to the scope of CORE, which was something that several countries were asking, which could have made it easier to find an agreement on this tax potentially. Thank you.
Thomas Byrne
Look, I think what we've put forward in the negotiating box will be, I suppose, a basis for the leaders to have a discussion on these new own resources. And I suppose we wanted to be able to allow the leaders to have that discussion in the fullest possible way. But obviously they will be discussed very seriously by the leaders in the weeks and months ahead. But we've retained the Commission's proposal. We wanted to be ambitious on own resources.
Speaker 17
But of course we will have to wait for the discussion that the leaders will have on all of this.
Rick Rutten
Hi there, thank you for doing this. Rick Rutten, NRC Netherlands. It's a follow-up on the question on CORE.
You just said that you retained the Commission's proposal, but we've heard some recent reporting in the Financial Times that the Commission itself is drawing up plans to change it significantly, to spare mid-sized enterprises, to capture more revenue from tech companies. Is that something you are open to, or will you still defend the current setup of own resources as we can read it in this negotiation box? Thank you.
Thomas Byrne
Well, all I can do as Presidency is put forward a negotiating box as Presidency, not as as Ireland. And we've done that, and we've been very, very careful to be the honest broker, to be the neutral party on this, and to put forward this proposal on own resources, which again will will allow the leaders to have a discussion on this matter. There may well be other proposals from the Commission. They can discuss them as well. But the leaders will take this forward under the President of the European Council in in the weeks ahead.
But I don't come here as Ireland. I come here as Irish Presidency of the Council of the European Union. So that's the only basis on which I can put forward a nego box like this. And I think we've done that. And again, I want to thank everybody who's engaged with us as well.
We've done we've we've been we've worked really hard on this. We've engaged in the so-called confessional meetings with member states, which stay completely secret.
As one Minister said to me, "If this is confession, I am the sinner." I'm not saying which side of the debate they were from, but I think the process that we've done has been very confidential, has been designed to find out where the red lines and bottom lines of all Member States are. And we have done that as the neutral chair. We've had to do that as the neutral chair. And it is our expectation now that the leaders will take this forward and discuss this at the European Council.
They will have maybe three opportunities to do that before Christmas. And I think our citizens expect agreement. Our citizens in many cases depend on the funds. And our nego-box is designed to allow that process to happen.
Owen
Okay, last question. I'll go in the room to Hendrik please and then we'll wrap up. Thank you.
Hendrik Kafsack
Hendrik Kafsack, Frankfurter Allgemeine Zeitung. Just two quick questions. First, I'm still not really clear about how you want to bring the frugals, the so-called, on board. I mean, they asked for two things: significant cuts, more than 200 billion, and cuts across the board. And you provided neither of that in your proposal.
And secondly, back to own resources. You're saying that you want to have the fullest possible debate about that.
I still don't understand why you didn't take the three proposals of the European Parliament on board and kept core, because it doesn't really make sense to me.
Thomas Byrne
Well, on the first question about savings, while Common Agricultural Policy and cohesion have been protected, there are actually savings across every heading. So there are savings in heading one, and heading two, and heading three, and heading four. That's there. So again, if that's the demand, we have met that. There are also financial savings across the whole thing of 8%, 141 billion euro, which is very, very significant.
We've tried to bring everybody along. We've had intensive exchanges with the member states and the institutions over the last three months. We had to listen to everybody. We heard the debates very publicly played out. And it's our job then to get everyone together, because you need unanimity on this proposal.
And it was really that, that was in our heads the whole way through, that we need to get unanimity. It's not, you know, no one member state decides this, but at the same time I need every single member state to agree to it. So we believe that there is something here for everybody in terms of what they sought.
Some of those who were looking for very significant cuts also wanted Heading 2 protected as well, and Heading 2 sees a very significant increase on the similar funds in the current MFF. On the own resources, we have left the existing proposals that the Commission had put forward in their proposal. It's as simple as that. It would form a basis for agreement. In terms of the additional proposals, we didn't see that the, we weren't convinced that the technical work, that we'd have time to do that to make sure that there would be money or that it would be technically possible.
But very specifically in the negobox, we have left it open for new own resources other than the ones that are proposed by the Commission can be considered by the member states, and that's very specifically there. Okay, this is the final, final one because I see a hand up online. Susana, please.
Susana FREXES
Thank you, thank you so much. Susana Frexes, SIC Portugal. So I was trying to compare a bit your proposal with the Cypriot proposal. So in terms of national envelopes, everything is more or less the same that as it was proposed in July.
So, basically, including this one-off reinforcement that was proposed for countries that are below 90% of GNI. Or is there something else that I missed?
Yes, that's retained.
Susana FREXES
No, that's retained, yeah. And just one last question. When it comes to rebates, is also your opinion that they are no longer justified? Thank you.
Owen
Okay, and with that we'll finish up. Thank you very much for joining us on a Saturday morning. We appreciate it. Thank you.
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