Tag - Own Resources

The Heritage Foundation goes from MAGA to MEGA — Make Europe Great Again
ROME — The conservative think tank behind Donald Trump’s Project 2025 roadmap is looking for new friends across the Atlantic.  The Heritage Foundation, the intellectual engine behind the 922-page blueprint that has become the key policy manual for Trump’s second term, is partnering with a constellation of European nationalist far-right movements to export its playbook for countering progressive policies.  That included a conference in late October at the frescoed former home of late premier Silvio Berlusconi in Rome focused on Europe’s demographic crisis and the idea that falling birthrates pose a threat to Western civilization. Speakers included Roger Severino, Heritage’s vice president of domestic policy and the architect of the group’s campaign to roll back abortion access in the U.S., as well as Italy’s pro-life family minister Eugenia Roccella, the deputy speaker of the Senate, and members of Italian right-wing think tanks.  Severino and the Heritage Foundation’s president, Kevin Roberts, have also been speaking guests at summits and assemblies of far-right groups such as Patriots for Europe, which includes Marine Le Pen’s Rassemblement National and Italy’s League, under a Make Europe Great Again banner.  Meanwhile Heritage representatives have held private meetings in Washington and Brussels with lawmakers from far-right parties in Hungary, Czechia, Spain, France and Germany. Just in the past 12 months, the group held seven meetings with members of the European Parliament, compared to just one in the five years prior, according to Parliament records. And they’ve had additional meetings with MEPs that weren’t formally reported, including with three members from Italian Prime Minister Giorgia Meloni’s Brothers of Italy party. Severino told POLITICO that meetings with the European right serve to exchange ideas. But the meetings signal more than pleasantries. For European politicians, they’re a way to get access to people in Trump’s orbit. For Heritage, they’re a way to extend influence beyond Washington and achieve its ideological goals, which under Roberts have grown increasingly aligned with Trump’s MAGA approach.  Mike Gonzalez, a senior fellow at Heritage, said he meets with conservative parties to share experience in dealing with common challenges — “comparing notes, that kind of thing.” He said his interlocutors are “very interested” in policies on abortion, gender theory, defense and China, adding that parts of Project 2025 such as a section he wrote on defunding public broadcasters, are “very transferable” to Europe.  The foundation has been active in Europe for years, he points out, but demand has increased since Trump’s return to office. European right-wing leaders, Gonzalez said, “see Trump and what he is doing and say, ‘I want to get me some of that.’”  BETTER THE SECOND TIME It’s not the first time MAGA has attempted to galvanize the European right. Trump’s former strategist Steve Bannon unsuccessfully tried to unite populist nationalist parties under the Movement think tank in 2019, hamstrung by a lack of buy-in from the parties themselves.  Some observers are doubtful this renewed push will go differently. “I’m skeptical that it will amount to much,” said EJ Fagan, an associate politics professor at the University of Illinois and author of The Thinkers, a book on partisan think tanks. “The European right have their own resources that produce policies, so there’s not a lot Heritage can provide to European parties.”  That is especially an issue, Fagan noted, when it comes to finessing legislation, since Heritage doesn’t have a deep bench of “people who have a fine understanding of laws and treaties” in Europe.  But the Heritage Foundation’s European mission comes as far-right groups gain ground across Europe by tapping public frustration over issues such as immigration, climate policy and sovereignty and pushing policies that are similar to those laid out in the group’s Project 2025 agenda.  Heritage Foundation’s president, Kevin Roberts, have also been speaking guests at summits and assemblies of far-right groups such as Patriots for Europe. | Jim Lo Scalzo/EPA In Italy, two MPs have proposed legislation granting fetal personhood, which would make abortion impossible. The regional government in Lazio is preparing to approve a law that would guarantee protection of the fetus “from conception,” echoing a similar push in the US. And Rocella, Meloni’s family minister who appeared last month with Heritage’s Severino, is attempting to block a regional law banning conscientious objectors from roles in clinics providing abortions.  It’s not just reproductive rights. Meloni’s government has pulled out of a memorandum of understanding on the Belt and Road Initiative, the Chinese government’s ambitious program that aims to finance over $1 trillion in infrastructure investments. It effectively blocked Chinese telecoms giant Huawei from being a part in telecommunications development.  Lucio Malan, an MP in Meloni’s Brothers of Italy party and a panelist at two conferences organized with the Heritage Foundation, attempted to reverse a ban on homophobic and sexist advertisements — though he told POLITICO he took part in the events on the invitation of the center-right FareFuturo think tank, which co-organized the events with Heritage.   Heritage and its allies in the Trump administration have everything to gain from stronger nationalist parties in Europe, which are also pushing for delays in climate and agriculture regulations and sided with the US and Big Tech on digital regulation. Earlier this year, Heritage hosted the presentation of proposals by two far-right European think tanks, Hungary’s Mathias Corvinus Collegium (MCC) and Poland’s Ordo Iuris Institute for Legal Culture, to overhaul and hollow out the EU, undermining the commission and the European Court of Justice. And Heritage’s activity in Europe comes as the organization faces a swirl of controversy back home after Roberts sided with right-wing political commentator Tucker Carlson over criticism for interviewing a white nationalist. The incident triggered an open revolt against Roberts, who subsequently apologized. The unexpectedly swift and wide-ranging implementation of Project 2025 in the U.S. has boosted Heritage’s credentials in Europe, said Kenneth Haar of Corporate Europe Observatory, a non-profit that monitors lobbying in the EU. “Trump’s wholesale adoption of their agenda has given them unparalleled status,” he said. Now, Haar added, Heritage “is not just a think tank from the U.S., it is a representative of the MAGA coalition. It is not an exaggeration to say they are carrying out foreign policy on behalf of the president.” But the Heritage Foundation’s European mission comes as far-right groups gain ground across Europe by tapping public frustration over issues such as immigration, climate policy and sovereignty and pushing policies that are similar to those laid out in the group’s Project 2025 agenda. | Shawn Thew/EPA For Heritage, there’s good reason to focus on Europe in particular: It has become a focal point for the group’s donors and activists in the U.S., who fret about perceived Islamicization and leftist politics on the continent.  “We have an existential interest in having Europe be sovereign and free and strong,” Gonzalez told POLITICO. A RALLYING POINT Historically, Europe’s right has struggled to cooperate, with different factions representing conflicting national interests. But the machinery underpinning Trump’s reelection, and his ability to move national policy in European capitals, has shifted those dynamics, making Heritage “a factor in uniting the European right,” Haar said.  “MAGA has become a rallying point, the European right is meeting more frequently,” he added. Trump’s support for their policies also gives them more “clout” in Europe, he said, as Europe’s leaders seek favor from Trump and his allies across a range of issues, including tariffs.  Transparency activists said that they’re seeing a notable uptick in activity that suggests Heritage is gaining traction beyond symposiums and events.  Raphaël Kergueno, Senior Policy Officer at Transparency International, a NGO advocating against undue political influence, said the group’s activities — including those undeclared meetings with MEPs, which may put those members in breach of the European Parliament’s code of conduct — underscores the weakness of European rules on lobbying and advocacy.  Kenneth Haar added, Heritage “is not just a think tank from the U.S., it is a representative of the MAGA coalition. It is not an exaggeration to say they are carrying out foreign policy on behalf of the president.” | Shawn Thew/EPA “The Heritage Foundation has pushed blatantly anti-democratic projects, and is now free to court MEPs without disclosing its goals or funding,” he said. “If the EU does not clean up its act, it will allow hostile actors to import authoritarianism through the backdoor.” But Nicola Procaccini, an MEP in Meloni’s party who has held several meetings with Heritage, dismissed the idea that Heritage presents a danger to the rule of law or to European politics. He said he has not read Project 2025, and pointed to the group’s long history as an economic policy powerhouse — though that has changed in the Trump era, as the group’s new head Roberts has pivoted closer to Trump.  Nevertheless, he said, “You can share or not share their views … but Heritage is certainly an authoritative voice.”  
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Trump’s fossil fuel crusade confronts the climate faithful
President Donald Trump is no longer content to stand aloof from the global alliance trying to combat climate change. His new goal is to demolish it — and replace it with a new coalition reliant on U.S. fossil fuels. Trump’s increasingly assertive energy diplomacy is one of the biggest challenges awaiting the world leaders, diplomats and business luminaries gathering for a United Nations summit in Brazil to try to advance the fight against global warming. The U.S. president will not be there — unlike the leaders of countries including France, Germany and the United Kingdom, who will speak before delegates from nearly 200 nations on Thursday and Friday. But his efforts to undermine the Paris climate agreement already loom over the talks, as does his initial success in drawing support from other countries. “It’s not enough to just withdraw from” the 2015 pact and the broader U.N. climate framework that governs the annual talks, said Richard Goldberg, who worked as a top staffer on Trump’s White House National Energy Dominance Council and is now senior adviser to the think tank Foundation for Defense of Democracies. “You have to degrade it. You have to deter it. You have to potentially destroy it.” Trump’s approach includes striking deals demanding that Japan, Europe and other trading partners buy more U.S. natural gas and oil, using diplomatic strong-arming to deter foreign leaders from cutting fossil fuel pollution, and making the United States inhospitable to clean energy investment. Unlike during his first term, when Trump pulled out of the Paris Agreement but sent delegates to the annual U.N. climate talks anyway, he now wants to render them ineffective and starved of purpose by drawing as many other countries as possible away from their own clean energy goals, according to Cabinet officials’ public remarks and interviews with 20 administration allies and alumni, foreign diplomats and veterans of the annual climate negotiations. Those efforts are at odds with the goals of the climate summits, which included a Biden administration-backed pledge two years ago for the world to transition away from fossil fuels. Slowing or reversing that shift could send global temperatures soaring above the goals set in Paris a decade ago, threatening a spike in the extreme weather that is already pummeling countries and economies. The White House says Trump’s campaign to unleash American oil, gas and coal is for the United States’ benefit — and the world’s. “The Green New Scam would have killed America if President Trump had not been elected to implement his commonsense energy agenda — which is focused on utilizing the liquid gold under our feet to strengthen our grid stability and drive down costs for American families and businesses,” White House spokesperson Taylor Rogers said in a statement. “President Trump will not jeopardize our country’s economic and national security to pursue vague climate goals that are killing other countries.” ‘WOULD LIKE TO SEE THE PARIS AGREEMENT DIE’ The Trump administration is declining to send any high-level representatives to the COP30 climate talks, which will formally begin Monday in Belém, Brazil, according to a White House official who declined to comment on the record about whether any U.S. government officials would participate. Trump’s view that the annual negotiations are antithetical to his energy and economic agenda is also spreading among other Republican officials. Many GOP leaders, including 17 state attorneys general, argued last month that attending the summit would only legitimize the proceedings and its expected calls for ditching fossil fuels more swiftly. Climate diplomats from other countries say they’ve gotten the message about where the U.S. stands now — and are prepared to act without Washington. “We have a large country, a president, and a vice president who would like to see the Paris Agreement die,” Laurence Tubiana, the former French government official credited as a key architect of the 2015 climate pact, said of the United States. “The U.S. will not play a major role” at the summit, said Jochen Flasbarth, undersecretary in the German Ministry of Environmental Affairs. “The world is collectively outraged, and so we will focus — as will everyone else — on engaging in talks with those who are driving the process forward.” Trump and his allies have described the stakes in terms of a zero-sum contest between the United States and its main economic rival, China: Efforts to reduce greenhouse gas emissions, they say, are a complete win for China, which sells the bulk of the world’s solar, wind, battery and electric vehicle technology. That’s a contrast from the approach of former President Joe Biden, who pushed a massive U.S. investment in green technologies as the only way for America to outcompete China in developing the energy sources of the future. In the Trump worldview, stalling that energy transition benefits the United States, the globe’s top producer of oil and natural gas, along with many of the technologies and services to produce, transport and burn the stuff. “If [other countries] don’t rely on this technology, then that’s less power to China,” said Diana Furchtgott-Roth, who served in the U.S. Transportation Department during Trump’s first term and is now director of the Center for Energy, Climate and Environment at the conservative think tank the Heritage Foundation. TRUMP FINDS ALLIES THIS TIME Two big developments have shaped the president’s new thinking on how to counteract the international fight against climate change, said George David Banks, who was Trump’s international climate adviser during the first administration. The first was the Inflation Reduction Act that Democrats passed and Biden signed in 2022, which promised hundreds of billions of dollars to U.S. clean energy projects. Banks said the legislation, enacted entirely on partisan lines, made renewable energy a political target in the minds of Trump and his fossil-fuel backers. The second is Trump’s aggressive use of U.S. trading power during his second term to wring concessions from foreign governments, Banks said. Trump has required his agencies to identify obstacles for U.S. exports, and the United Nations’ climate apparatus may be deemed a barrier for sales of oil, gas and coal. Trump’s strategy is resonating with some fossil fuel-supporting nations, potentially testing the climate change comity at COP30. Those include emerging economies in Africa and Latin America, petrostates such as Saudi Arabia, and European nations feeling a cost-of-living strain that is feeding a resurgent right wing. U.S. Energy Secretary Chris Wright drew applause in March at a Washington gathering called the Powering Africa Summit, where he called it “nonsense” for financiers and Western nations to vilify coal-fired power. He also asserted that U.S. natural gas exports could supply African and Asian nations with more of their electricity. Wright cast the goal of achieving net-zero greenhouse gas pollution by 2050 — the target dozens of nations have embraced — as “sinister,” contending it consigns developing nations to poverty and lower living standards. The U.S. about-face was welcome, Sierra Leone mining and minerals minister Julius Daniel Mattai said during the conference. Western nations had kneecapped financing for offshore oil investments and worked to undercut public backing for fossil fuel projects, Mattai said, criticizing Biden’s administration for only being interested in renewable energy. But now Trump has created room for nations to use their own resources, Mattai said. “With the new administration having such a massive appetite for all sorts of energy mixes, including oil and gas, we do believe there’s an opportunity to explore our offshore oil investments,” he said in an interview. TURNING UP THE HEAT ON TRADING PARTNERS Still, Banks acknowledged that Trump probably can’t halt the spread of clean energy. Fossil fuels may continue to supply energy in emerging economies for some time, he said, but the private sector remains committed to clean energy to meet the U.N.’s goals of curbing climate change. That doesn’t mean Trump won’t try. The administration’s intent to pressure foreign leaders into a more fossil-fuel-friendly stance was on full display last month at a London meeting of the U.N.’s International Maritime Organization where U.S. Cabinet secretaries and diplomats succeeded in thwarting a proposed carbon emissions tax on global shipping. That coup followed a similar push against Beijing a month earlier, when Mexico — the world’s biggest buyer of Chinese cars — slapped a 50 percent tariff on automotive imports from China after pressure from the Trump administration. China accused the U.S. of “coercion.” Trump’s attempt to flood global markets with ever growing amounts of U.S. fossil fuels is even more ambitious, though so far incomplete. The EU and Japan — under threat of tariffs — have promised to spend hundreds of billions of dollars on U.S. energy products. But so far, new and binding contracts have not appeared. Trump has also tried to push China, Japan and South Korea to invest in a $44 billion liquefied natural gas project in Alaska, so far to no avail. In the face of potential tariffs and other U.S. pressure, European ministers and diplomats are selling the message that victory at COP30 might simply come in the form of presenting a united front in favor of climate action. That could mean joining with other major economies such as China and India, and forming common cause with smaller, more vulnerable countries, to show that Trump is isolated. “I’m sure the EU and China will find themselves on opposite sides of many debates,” said the EU’s lead climate negotiator, Jacob Werksman. “But we have ways of working with them. … We are both betting heavily on the green transition.” Avoiding a faceplant may actually be easier if the Trump administration does decide to turn up in Brazil, said Li Shuo, the director of China Climate Hub at the Asia Society Policy Institute in Washington. “If the U.S. is there and active, I’d expect the rest of the world, including the EU and China, to rest aside their rhetorical games in front of a larger challenge,” Li wrote via text. And for countries attending COP, there is still some hope of a long-term win. Solar, wind, geothermal and other clean energy investments are continuing apace, even if Trump and the undercurrents that led to his reelection have hindered them, said Nigel Purvis, CEO of climate consulting firm Climate Advisers and a former State Department climate official. Trump’s attempts to kill the shipping fee, EU methane pollution rules and Europe’s corporate sustainability framework are one thing, Purvis said. But when it comes to avoiding Trump’s retribution, there is “safety in numbers” for the rest of the world that remains in the Paris Agreement, he added. And even if the progress is slower than originally hoped, those nations have committed to shifting their energy systems off fossil fuels. “We’re having slower climate action than otherwise would be the case. But we’re really talking about whether Trump is going to be able to blow up the regime,” Purvis said. “And I think the answer is ‘No.’” Nicolas Camut in Paris, Zia Weise in Brussels and Josh Groeneveld in Berlin contributed to this report.
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Is €1.2T enough to save Europe?
BRUSSELS — Mario Draghi, Italy’s former prime minister, was enjoying his retirement when the phone rang. It was September 2023, and Ursula von der Leyen’s office wanted to know if he might do one last job for Brussels: find a way to make Europe competitive again.  “I had to think for a few days … before actually saying yes,” Draghi recalled later as he published his final report on reinvigorating the European Union economy. “The task seemed to be so daunting, so difficult.”  On Wednesday, Draghi’s ideas on competitiveness will be back in focus as von der Leyen unveils her blueprint for the EU’s next seven-year budget, in what will be a defining moment in her tenure as European Commission president.  The Multiannual Financial Framework (MFF), as the behemoth of a long-term spending plan is known, will apply from 2028 to 2034. The fact that two years have been set aside for negotiations over what the budget contains is a sign that — as usual — von der Leyen expects a huge battle with national governments, who must unanimously agree on its contents.  Commission officials spent the weekend locked in marathon meetings to finalize the proposal and were still working late into Monday evening, fueled on pizza, cola and water. The stakes could hardly be higher. The MFF proposal will need to finance the EU to cope with unprecedented challenges, including a trade war with Donald Trump’s America; an actual war with Vladimir Putin’s Russia; intensified competition from China; conflict in the Middle East; climate change; international migration; and the rise of the far right, with its anti-Brussels political agenda.  In the words of Draghi, the venerable sage of European economics: “We have reached the point where, without action, we will have to either compromise our welfare, our environment or our freedom.” The EU’s current core budget is worth around €1.2 trillion, hardly a small number.  But that represents only around 1 percent of total EU GDP, compared with 48 percent for the budget of Germany and 57 percent for France. Respected observers — including Draghi — argue that EU public sector investment is woefully inadequate to meet the challenges facing the continent.  The question is, how much bigger does the Brussels budget bazooka need to be? The answer varies wildly, depending on who is giving it. Some countries want zero increase while others want the EU budget to double, said Jan Stráský, senior economist at the OECD.  “This is the range, zero to double, and my assessment would be that by increasing it by less than half, you could already achieve a lot of what makes sense to do at the EU level,” Stráský told POLITICO. “Perhaps let’s say 20 or 30 percent” — which would take the total budget up to around 1.3 percent of GDP — “if well spent, could be a huge improvement.”  LOW-HANGING FRUIT As well as a bigger pot overall, the OECD recommended, in a report this month, reprioritizing existing EU funds to focus on defense and a more integrated electricity market, which would reduce power costs and help spur growth.  A bigger share of public spending should be handed over to Brussels, the think tank suggested, to coordinate more efficient cross-border infrastructure projects, like electricity interconnectors, and defense procurement.  On Wednesday, Mario Draghi’s ideas on competitiveness will be back in focus as Ursula von der Leyen unveils her blueprint for the EU’s next seven-year budget. | Daniel Dal Zennaro/EPA “It’s also not about looking for the perfect solution, it’s about reaping the first-order benefits like the lowest-hanging fruit,” Stráský said.  Other analysts say Brussels must be even more ambitious if the EU is to meet the moment. According to Zsolt Darvas, one of the authors of a new study from the Bruegel think tank, the MFF spending envelope needs to double, more or less, to take account of the need for financing the climate transition and paying off its Covid-19 debts.  “The European Union faces growing pressure to deliver on priorities that are increasingly European in nature,” the Bruegel study concluded. “Challenges including the climate and digital transitions, competitiveness, economic resilience, defence, migration management and foreign policy go beyond national borders and demand coordinated and well-resourced responses. But the EU’s main financial instrument, its budget — or Multiannual Financial Framework (MFF) — remains stuck in the past.”  Darvas proposed raising the budget to around 2 percent of GDP. Such an increase would put the EU budget on track to meet its share of the additional €800 billion a year Draghi said would be required from the private and public sectors to revive Europe’s economic competitiveness.  Some countries, including France, agree that the EU budget needs to get bigger. Others, like Germany and the Netherlands, don’t want the budget to grow at all. “Sweden is mindful of not just buying into the narrative that now we need a larger budget because we have new problems to handle,” Swedish EU Affairs Minister Jessica Rosencrantz told POLITICO. “We will have to do priorities within the budget.”  Sweden is particularly keen for the MFF to address defense and security, though some analysts say EU law prevents the bloc from making direct military expenditure through its long-term budget. “How exactly that should be formulated or portrayed in the budget, that we will have to come back to,” Rosencrantz said. “But I think defense, security, support for Ukraine as well, also competitiveness — those will be the topics that a new budget should handle.”  Draghi also proposed radically simplifying the budget, an idea von der Leyen has taken on with her outline proposal to combine the Common Agricultural Policy and Cohesion Fund — the EU’s biggest outlays — into a single mega fund.  A second pillar of the MFF, under the outlines already announced by the Commission, would create a new European Competitiveness Fund, providing investment capacity for key sectors and support for research. The third pillar of the budget would be a new external action fund, combining development aid and diplomacy, under von der Leyen’s initial plan.  Already, some EU countries and politicians are up in arms about these reforms, particularly on cash for European farmers and economically struggling regions.  EU TAXES? So much for the spending. The harder part — potentially, at least — is deciding where the money should come from in the first place.  A fierce debate is already underway over whether new forms of these “own resources,” as the EU’s income is termed, should be approved as part of the new budget, potentially by expanding the share of revenue Brussels can take from existing taxes or financial arrangements.  EU Budget Commissioner Piotr Serafin has promised “an ambitious own resources package” which will “on the one hand strengthen the financial capacity of what we have here at the European level, but on the other hand will be also politically and socially acceptable for the member states but also for the citizens of Europe.” | Guillaume Horcajuelo/EPA One reason often cited in favor of new forms of own resources is to take the heat out of the debate over different countries’ contributions to the budget, the political fixation with so-called “net balances.”  Countries that are net contributors — like Germany, the Netherlands and Sweden — pay more into the pot than they receive back. That often makes it politically harder for these governments to justify to their domestic audiences why the EU’s overall budget must rise.  EU Budget Commissioner Piotr Serafin has promised “an ambitious own resources package” which will “on the one hand strengthen the financial capacity of what we have here at the European level, but on the other hand will be also politically and socially acceptable for the member states but also for the citizens of Europe.” He will need luck on his side. “We don’t see a need for new own resources and definitely not European taxes,” said Sweden’s Rosencrantz. “We know there’s a large discussion on everything from using revenues from the EU Emissions Trading Scheme and Carbon Border Adjustment Mechanism to different kinds of other forms of new own resources. This is not something that Sweden sees the need for. We would rather see a focus on re-priorities within the budget, which is always difficult, but that’s what you have to do in a national budget, also when you have new challenges to address.”  RULE OF LAW One way to make savings is to prevent “a single euro” from going to any country that flagrantly breaches the EU’s democratic “rule of law” standards, Rosencrantz added. It’s a view that chimes with the Commission’s aims for the next MFF.  Von der Leyen’s team is working up a new regime of “conditionality” which would strengthen the financial penalties for countries like Hungary (and, in the past, Poland) that Brussels has found to be failing to uphold the democratic freedoms it says are core to the EU’s values.  But when every EU country has to agree on the budget package in full — including Viktor Orbán’s Hungary — there’s no guarantee that any conditionality rules will make it through to the final budget blueprint, whatever von der Leyen and her commissioners want.  In truth, the question over punishing countries for falling short on the “rule of law” comes back to the same essential question underpinning the entire budget: What is the EU really for? How much, in this era of multiple global challenges, should the bloc’s 27 countries do together, via action coordinated inside towering glass and steel offices in Brussels, and how much should they decide at home?  In the end, the scale and scope of the EU’s final budget will be an expression of the bloc’s collective answer to this question.  “If you look back at the history of the agreements on the next MFF, we saw very limited changes from one framework to the next,” said Darvas, one of the Bruegel report authors. In his view, the biggest risk to the EU rising to the challenges it now faces is that the requirement for unanimous agreement between 27 countries will “severely limit” any room for reform. “There is huge rigidity,” he said. “I’m a bit skeptical that there will be big changes this time either.”
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The non-geek’s guide to the Brussels budget fight
BRUSSELS ― As Europe teeters on the edge of a full-blown trade war with the United States, the EU’s 27 commissioners will gather on Wednesday to settle one of the thorniest issues in Brussels: its own finances. Farmers, startups, filmmakers and defense lobbies ― they all have a stake in the EU’s seven-year cash pot, which is currently worth €1.2 trillion. And everyone’s fighting tooth and nail to protect their share of the pie from European Commission President Ursula von der Leyen’s likely cuts. You’ll be forgiven for dismissing this as a subject for geeks. But reforming the EU’s mammoth budget might instead be remembered as one of von der Leyen’s legacy achievements ― or a fiasco. “The budget is politics cast in figures,” said Johannes Hahn, the EU’s former budget commissioner. And the last weeks of fierce negotiations over the seven-year spending plan from 2028 are proving him right. Commissioners are up in arms against von der Leyen’s attempts to trash their pet programs, governments are filling her inbox with angry messages ― and farmers are ready to take to the streets if their demands aren’t met. “I have the tractor and I’m ready,” Massimiliano Giansanti, the head of Europe’s powerful Copa farming lobby, warned in response to rumored cuts to the EU’s massive farm aid budget. With a few days to go until von der Leyen unveils her proposal on Wednesday, a lot is still up in the air ― and anything that’s decided by the Commission can be binned by national governments and the European Parliament during two years of serpentine negotiations. Before Wednesday, commissioners and their top advisers will have to answer crucial questions — How big will the budget be? Which taxes will be levied to repay the EU’s debt? Will regions still matter? ― during emergency talks in the Berlaymont. Here’s what they’ll be arguing about: HOW MUCH MONEY … The EU in the coming years will have to do more with roughly the same amount of money. A big question mark hangs over the figures, which are kept secret until the very last minute. But it’s an open secret that the available money won’t be enough to cater for the new priorities ― from defense to innovation to climate disasters ― that have kept piling up over the last few years. EU climate chief Teresa Ribera, a Spanish socialist, is fighting to increase ― or at least preserve ― the 30 percent climate target to show that the EU is not abandoning its green agenda. | Olivier Matthys/EPA At a time of squeezed budgets and slowing growth, the EU’s two largest countries ― France and Germany ― and several others have little appetite to send more money to Brussels, putting the Commission in a tight spot. To free up more funding for defense and startups, the bloc’s budget department is thinking of cutting up to 20 percent from the EU’s farming and regional budgets ― which jointly make up two-thirds of its current cash pot. But that won’t be a walk in the park as the farmers lobby, researchers and regions across Europe ― and their powerful backers in the Parliament and the European Council ― are pushing back against any cuts. WILL REGIONS STILL MATTER … Von der Leyen’s big idea is to merge a plethora of programs into a single national cash pot, which will determine spending in sectors ranging from farm subsidies to social housing. Under this new system, budget payments ― especially regional spending, which makes up a third of the EU budget ― will be linked to the fulfillment of reforms. Supporters argue this will make it easier for recipients to access EU money and will encourage productivity by incentivizing national reforms. However, a majority of EU governments are worried that the change would empower central administrations and sideline regions, which currently play a big role in spending EU funds. There are lingering fears that handing the money to national governments ― as opposed to poorer regions, as is currently the case ― could undermine the EU’s goal of reducing disparities across the bloc.  WHICH NEW TAXES WILL BE INTRODUCED … The Commission is under a lot of pressure to introduce new EU-wide levies or transfers from national tax revenues ― known as “own resources” ― to pay back €25 billion to €30 billion per year in joint debt that was issued to finance the bloc’s post-Covid recovery. But the last years of discussions in Brussels have confirmed Winston Churchill’s maxim that “there is no such thing as a good tax.” National governments are wary of giving the bloc too much power to extract money from their voters and generally oppose handing a share of their domestic tax revenue to Brussels. Currently, the vast majority of EU funds come from governments’ contributions. The Commission on Friday floated three new taxes targeting nonrecycled electric waste, tobacco products and large companies in the EU with a turnover of more than €50 million, according to an internal document seen by POLITICO. This comes on top of two separate ideas from 2021 to levy a carbon border tax and to take a share of the revenues generated by the Emissions Trading System. While the ideas are still on the table, each one is opposed by different groups of EU members. Finding unanimity on any new tax won’t be easy.   HOW MUCH GREEN SPENDING … During the last budget negotiations, the EU agreed that at least 30 percent of its expenditure should be directed toward climate goals. But green spending has fallen out of fashion, with right-wing parties surging and competitiveness overtaking the environment on the EU’s priority list. EU climate chief Teresa Ribera, a Spanish socialist, is fighting to increase ― or at least preserve ― the 30 percent climate target to show that the EU isn’t abandoning its green agenda. But Budget Commissioner Piotr Serafin is pushing in the opposite direction over fears that such a high threshold will make it harder to shuffle funding according to needs. There’s little time for von der Leyen to make a final decision on the climate target ― and on everything else.
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