2023-07-25 10:33:25
Shortly before the two-day EU conference on EU migration policy, Hungarian President Victor Orbán at the end of June accused the EU of being on the verge of bankruptcy and inquired regarding the whereregardings of EU funds.
Attack is the best defense. This wisdom comes to mind because people like Orbán or the Spanish President Pedro Sánchez, who is regarding to be voted out of office, are among those heads of government who have refused to provide the EU Budget Control Commission with the necessary information regarding the whereregardings of EU funds. But the question remains. Where has the EU money gone?
The European Commission on June 7 proposed the EU budget for 2024 of 189.3 billion euros, including almost 4 billion euros for the repayment of EU loans. That’s 423 euros per EU resident, and 1,692 euros for a family of four.
But spending and arguably debt will continue to rise through 2027. The amortization of previous debt alone will increase to at least 15 billion per year by 2058. Public debt might increase to 800 to 1000 billion, which corresponds to around 2000 euros per EU inhabitant.
EU Commission President von der Leyen has admitted that the EU has so far spent around 30 billion euros on Ukraine and that these have been raised from EU reserves. But this fund is now exhausted. In plain language, this means that the EU is actually facing a financial collapse if the contributions are not increased within a reasonable period of time, be it through additional country contributions or the development of new sources of income.
Von der Leyen wants to discuss the financial budget up to the end of the financial period in 2027 in the coming weeks. However, this is a matter for the finance ministers. The fact that there are also taxpayers who have to foot the bill has obviously repressed them mentally.
It’s not just the massive spending to support Ukraine. The programs to restructure the economy and society devour huge sums of money. For this purpose, debt programs were designed which, due to inflation, will probably amount to around 1000 billion by the time the programs are finally implemented. In addition, there are higher interest costs, which are far above the budgeted values.
However, the budget will also be burdened by repayments of the loans taken out so far. Nevertheless, the EU does not want to reduce its spending spree. Parliament is almost desperately looking for new spending opportunities to justify its existence.
Orbán goes on to note that Hungary and Poland have not yet received the promised contributions and loans from the EU, which would lead to a further outflow of funds if they are finally paid out. He also criticizes the fact that the EU is demanding more funds in the migration area, but that these should not be used for increased border protection, but for bringing in more migrants.
The EU budget must be negotiated and approved unanimously by the member states and the European Parliament in the coming months. But what if Hungary, Poland and other EU countries reject the 2024 budget?
Procedurally, it is planned that in the event of differences of opinion between Parliament and the Council (the heads of state and government), a mediation commission will be set up, which must submit a mediation proposal within 21 days. The EU Parliament and the Council must approve the budget within a further fourteen days.
If the Council rejects the budget, the EU Parliament can still accept it, but only with a majority of the members and three quarters of the votes cast. If the Parliament and the Council reject the joint text, the Commission must present a new draft budget.
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