The EU budget is about more than money
Rich versus poor. Big versus small. Contributors versus takers. The agri lobby versus innovation addicts. Spenders versus savers. From the get-go of a long discussion, the lines have been clearly drawn around the European Union's seven-year budget, set for after 2020. That is no different from any EU budget talk. As always, EU leaders brought their countries' interests, positions and red lines with them to Friday's conference in Brussels. As always, a compromise must be reached by the end.
Yet what is different this time could be that budget talks serve as a moment of truth for the European Union. They will put into stark relief the smoldering conflict between the value-oriented older members and those newcomers from the east who are most in need of financial aid. Empty words will not suffice; money matters demand straight talk. The stubborn refusal of net beneficiaries such as Poland, Hungary or the Czech Republic to take in refugees, express solidarity and uphold EU law could be a final straw for net contributors. If the money were only for good conduct and fulfilling political criteria, a split long since visible could give way to a deep abyss.
Moment of truth for defiant recipients
It has nothing to do with extortion or fraud, as right-wing politicians in Poland, Hungary, or Germany's populist Alternative for Germany (AfD) party would like to believe. Those paying in have their interests, as well. The forthcoming budget battle could at last break the EU into core and peripheral parts. In light of Brexit, additional membership withdrawal are well within the realm of possibility. If Poland's ruling Law and Order Party (PiS) really believes it can bully Brussels, it should make good on threats and leave the EU and the money it gets. The real threat to the EU is if a nationalist-conservative party were to come to power in a net paying country, such as Italy, and turn its back on Brussels.
Also unique this time is the announcement by Germany, the EU's largest net contributor, to increase its payments to fill part of the hole left by Brexit. That is a position usually left for the end of negotiations, not offered right at the beginning. Is Germany worried about something or is it simply bad bargaining?
Less is more
Overall, it would do the EU well to assess and pare down its spending. Does it still make sense to give so much to agriculture? Does the EU have to support weak institutions? Is common border protection more important than student exchange? Is it really sensible to pay 130 billion euros ($160 million) every year to Brussels for it then to be redistributed? Surely member states could do much more with that on their own. Would it not be better, for example, if Germany subsidized its own agriculture without the EU's bureaucratic redistribution? Which tasks are most pressing to be financed at the European level?
Ultimately, agreement must and will be reached between the member states and European Parliament. Every country that wants to remain in the EU must make compromises, because the EU budget is plagued by unanimous consent. Nothing against Poland, Germany, Malta or Luxembourg; there will be many more feisty budget summits to come until 2019 when everything will be settled over the course of three nights. This has always been the EU's recipe. Will it be the EU's undoing this time?