EU budget 2021-2027: European leaders convene at virtual summit

Every year in June, European leaders usually meet in Brussels to discuss and make important decisions. This time the pandemic has kept them all at home but talks are still underway. European leaders, including Prime Minister Robert Abela, are currently meeting at a virtual summit that has on its agenda the European Union’s budget for the next seven years and the economic recovery plan post pandemic. European leaders are likely to meet again physically next month in an attempt to seal a budget deal.

The last time they met in Brussels to discuss the European Union budget was at a special summit held in February. It was the first summit for Prime Minister Robert Abela which was held a month after his appointment. Hindered by the pandemic, a number of meetings between European leaders have since taken place virtually behind office desks.

And so too was Thursday evening’s mid-June summit: a virtual summit which focused on a budget of almost two thousand million euros, one thousand million of them consisting in a budget for the seven years starting in January and another 750 million euros as part of the recovery plan proposed by the European Commission.

For the first time in a European budget, because of the pandemic, this plan for economic recovery will introduce the loan element. As Glenn Micallef, head of the European Union’s Coordination Department, explained, European leaders need to agree on how much funding will be provided by way of grants and loans.

During the meeting, Mr Micallef explained that Malta will continue to insist that the recovery plan should not lead to changes in its taxation policy.

“We will make this a temporary instrument to address the reality of today’s Covid 19 but we cannot create permanent mechanisms and new taxes to fund something that is temporary.”

Mr Micallef believes that the pandemic has strengthened the Maltese Government’s argument that Malta should benefit from European funds despite sustained economic growth which in recent years has been higher than the European Union average. “You have certain realities that used to apply then and still do today. For example when we talk about funds and the single market of a country that is in the centre of the continent. A country like Malta, on the periphery, has to catch at least two modes of transport. . ”

He argued that the recovery package could help member states reach a general agreement on the whole budget much earlier than expected. “We want to appreciate that urgency now requires us to reach an agreement and start spending the funds for the economy to gain momentum.”

The virtual summit on the budget and recovery plan is expected to culminate on Friday morning. However, indications are that in July European leaders will meet again, in the traditional way around the table in Brussels, in an attempt to seal a final agreement.