MEPs and the German EU presidency have finally found common ground after two months of tough negotiations on the EU budget for 2021-2027. The Parliament in Strasbourg called for a strengthening of several programmes deemed crucial and involving an additional €39bn, while the negotiated budget reached €1.074trn plus €750bn for the recovery plan (Next Generation EU). 

“The European Parliament received €16bn in addition to the (financial) package concluded in July,” announced the Strasbourg institution. With €2.2bn more pledged for the Erasmus programme (student mobility), €3.4bn for health, €1.5bn for border security and another billion for humanitarian aid, according to a list published by MEP José Manuel Fernandes (EPP). 

MEPs were particularly pleased to see that these additional funds come from sources of revenue for the EU: a plastic tax starting next year, then a carbon market reform, a digital tax and even a financial transaction tax (FTT). All these ideas had seemed to be postponed until the end of negotiations between member states. 

Budapest threatens with its veto 

Regarding the financial transaction tax, “the Commission will make a proposal in 2024, and states will have to deliberate in 2025, with plans to introduce it in 2026,” explained MEP and negotiator Valérie Hayer (Renew) as quoted in La Libre Belgique. 

This historic and “balanced” agreement, according to the German presidency, must be unanimously approved by the 27 member states. But Hungary is threatening a veto, rejecting the mechanism that makes the payment of European funds conditional on compliance with the principles of the rule of law. The mechanism would work by qualified majority and would therefore allow the council to sanction Budapest and Warsaw, which are multiplying reforms accused of undermining the independence of the justice system. 

Hungarian prime minister Viktor Orbán has already sent several European leaders a letter threatening to veto the entire budget, according to a European source.  

This article was originally published in French on Paperjam.lu and has been translated and edited for Delano.