BRUSSELS, May 2 (Reuters) - The European Commission announced on Wednesday proposals for a new multi-year budget that is expected to see EU countries squabble among themselves over how to fill the funding gap left by Britain’s exit next year.
The draft 2021-27 budget plan, around 1.11 percent of the bloc’s economic output versus the current 1.03 percent, aims to cut farm subsidies while increasing spending on research and digital technology, euro zone stability, security and defence.
The key elements are:
The introduction of a mechanism by which governments would see EU funds withheld if they are deemed not to be respecting the rule of law — in effect targeting ex-communist states where Brussels sees the independence of judges under threat.
Spending to almost triple to 33 billion euros ($39.57 billion) from current 13 billion in order to fund 10,000 border guards by 2027.
In its most ambitious defence plan for decades, the Commission proposed to spend 22 times more than in the 2014-2020 period - some 13 billion euros - on a joint weapons fund, research, shared financing for battlegroups and allowing a coalition of the willing to conduct more missions abroad. Overall, the next EU budget sets aside 27.5 billion euros for security and defence over the seven-year period. That includes 2.5 billion euros for an internal security fund to fight extremism and cybercrime.
A reform support programme with a 25-billion-euro budget to help EU countries with structural reforms, a new convergence facility to aid non-euro EU countries join the common currency, a European Investment Stabilisation Function, backed by loans guaranteed by the EU budget up to 30 billion euros, which will grant preferential loans to crisis hit EU countries.
Funding up by 26 percent to 123 billion euros to maintain stability and tackle migration. An off-budget 10.5 billion European Peace Facility to fund schemes with non-EU countries.
Some 22 billion euros annually targeted to be raised from new revenue streams, accounting for about 12 percent of the total budget, which include EU countries contributing 20 percent of revenues from emissions trading system auctions, a three percent call rate on a new common consolidated corporate tax base and 80 cents per kilogram of non-recycled plastic packaging waste for a total amount of about seven billion euros.
1.58 billion euros in one-off aid to workers laid off due to adverse developments in global trade and economic disruption
Direct payments will be reduced by four percent and better targeted, compulsory capping of subsidies will be imposed at farm level, with funds diverted to smaller farms in the same country. A new crisis reserve would be set up to deal with problems arising from unexpected developments resulting from the actions of non-EU countries. The overall EU agricultural budget will be cut by five percent.
12 billion euros — a ninefold increase
Funding up by 50 percent, with 100 billion euros for flagship programmes Horizon Europe and nuclear research programme.
All rebates to be phased out over five years and the rebate EU countries keep for collecting customs revenues to be halved to 10 percent from 20 percent.
$1 = 0.8339 euros Reporting by Foo Yun Chee; additional reporting by Robin Emmott, Editing by William Maclean