Sidelined on recovery, Parliament plans battle over EU budget

Members of the European Parliament felt sidelined in talks about the EU’s giant coronavirus recovery fund. Expect them to exact revenge by asserting their authority over the EU budget plan — which, at least theoretically, they could veto.

Led by Parliament President David Sassoli, MEPs on Thursday plan to declare in a resolution that they are ready to “withhold” their consent to the long-term budget, the Multiannual Financial Framework (MFF), to which the groundbreaking €750 billion recovery plan is attached — until they get a “satisfactory agreement” on a range of issues.

Many MEPs object to big cuts to proposed programs that were part of the overall €1.82 trillion budget-and-recovery package approved early Tuesday morning by the heads of state and government on the European Council. Many also want clearer guarantees about a mechanism to stop the flow of budget funds to countries violating the rule of law.

Some are also demanding greater certainty about new “own resources” — streams of revenue, like a proposed carbon border mechanism or a digital tax, intended to help pay off the joint debt taken by EU countries to finance the recovery fund.

Both von der Leyen and European Council President Charles Michel are expected to attend Thursday’s plenary session in Parliament to discuss the deal.

The Parliament’s saber-rattling might be viewed as largely symbolic, given the steep political risk of trying to block a historic deal that was reached after five days of painful and unprecedented negotiations by Europe’s top leaders. Doing so would also expose Parliament to accusations of delaying or stopping a plan designed to help European economies overcome the devastating effects of the coronavirus pandemic.

Those concerns were evident in behind-the-scenes negotiations over the resolution, in which some parliamentary leaders pushed to soften the draft resolution text from threatening to “reject” the budget plan, to threatening to withhold approval.

A Parliament spokesperson added that it was “clear” that Parliament was “not going to delay the recovery plan.”

“It would be unjustifiable and incomprehensible,” the spokesperson added.

Still, top national and EU leaders, including European Commission President Ursula von der Leyen, are mindful of the requirement to obtain Parliament’s consent, as well as its role in developing the legislative acts needed to implement programs financed by the MFF. Leaders, therefore, regard the objections seriously.

“The president met yesterday with President Sassoli, spoke the whole day with MEPs,” a senior Commission official said at a briefing for reporters on Wednesday. “So we’re very much focused on the European Parliament now.”

Both von der Leyen and European Council President Charles Michel are expected to attend Thursday’s plenary session in Parliament to discuss the deal.

EU leaders in recent weeks have repeatedly tried to show that they respect the Parliament’s role in the process, including by convening a mini-summit earlier this month with Sassoli and Angela Merkel, the chancellor of Germany, which now holds the rotating presidency of the Council of the EU.

At a dawn news conference Tuesday to announce the blockbuster budget deal, von der Leyen specifically stressed Parliament’s role, as well as the own resources issue, which she knows is a priority for many MEPs.

“Unlike in previous crises, this time member states have not opted for an intergovernmental agreement,” von der Leyen said. “But they have entrusted the European Commission of Europe’s recovery. We will together manage a total of €1.8 trillion. The bulk of the money will be channeled through the programs in which the European Parliament is involved.”

In a resolution adopted in May, MEPs had set a high bar by asking for a €2 trillion recovery package with funds “mostly, through grants,” as well as the introduction of “a basket of new own resources” and the abolition of rebates — the discounts some countries get on their contributions to EU coffers.

That €2 trillion, by historic measures, was roughly double the typical size of the MFF. They also demanded that Parliament be involved “in the shaping, adoption and implementation of the recovery fund.”

The Parliament is clearly not going to get everything it wants. But for MEPs, warning about withholding approval now that a deal has been done is more than just rhetoric; it’s about flexing the muscle of the EU institution widely perceived as closest to citizens.

“We play our role as Parliament,” said Valérie Hayer, a French MEP from the centrist Renew Europe, who is part of the negotiating team for the long-term EU budget and own resources reform. “This resolution is aimed at opening negotiations, and in every negotiation, there are expectations.”

MEPs will not have an opportunity to vote on the EU’s recovery plan itself. But the MFF — to which the recovery package is attached — needs the consent of an absolute majority in Parliament. If MEPs were to veto the MFF, which is likely to come to a vote in December, they would also torpedo the recovery deal.

“The European Parliament must play a much stronger role in the recovery plan.” — Pieter Liese, MEP

At a news conference Wednesday, Sassoli made clear that European lawmakers were “very satisfied” with the overall agreement but he complained of “unjustifiable cuts” to come programs in the €1.074 trillion MFF. “There is a proposal on the table, but we want to improve it,” Sassoli said.

Von der Leyen, too, has complained of some of those cuts.

Alexandra Geese, a German MEP from the Greens, cited cuts in research that “are not reasonable” and cuts on health that “are difficult for us to justify.”

“We must have some influence there,” Geese, who also sits on the Parliament’s Committee on Budgets, said.

Peter Liese, an MEP from the conservative European People’s Party, said: “I will make every effort to ensure that we welcome the agreement in principle at our plenary session on Thursday, but reject it in its present form.”

Liese added, “The European Parliament must play a much stronger role in the recovery plan.”