Opinion piece from Prime Minister's Office

The 'frugal four' advocate a responsible EU budget


Opinion Piece by Sebastian Kurz, chancellor of Austria. Mark Rutte, prime minister of the Netherlands, Mette Frederiksen, prime minister of Denmark, and Stefan Löfven, prime minister of Sweden, co-wrote this article, which was published in Financial Times on 17 February 2020.

On February 20, the leaders of the 27 EU countries will come together in an extraordinary European Council meeting to discuss the bloc's next long-term budget.

Our group of four countries, Austria, Denmark, Sweden and the Netherlands, stand ready to enter the final negotiations over the multiannual financial framework for 2021-2027. 

We have been dubbed the "frugal four" and I and my fellow leaders want to set the record straight. Being "frugal" does not mean that we are any less committed to the EU than those member states who are arguing for an expanded budget. On the contrary, our commitment to the EU is as strong as ever. The success of the European project is measured by our ability to deliver on our political ambitions and achieve tangible results for our citizens — not by the size of the budget.

Standing up for common values does not have a price tag, and the single market, a considerable driver of European competitiveness, is not a costly endeavour. We must also consider that the UK, a large contributor to the EU budget, has left the bloc. Now that we have a smaller union of 27 member states, we simply have to cut our coat according to our cloth. The responsible approach in this situation is to prioritise in the interest of our taxpayers.

Our four countries will engage in the negotiations based on a set of priorities. Above all, our budget contribution must remain stable, taking into account inflation and economic growth. This requires the budget to remain at 1 per cent of EU gross national income and a system of permanent corrections to protect individual states from having to shoulder excessive budgetary burdens.

Let us be clear: a budget of 1 per cent means more money, in nominal terms, than the current financial framework. It would allow the EU budget to keep growing with the economy, thereby providing room for higher ambition in key policy areas. This cannot mean, however, that we continue with business as usual. It is crucial for the EU's legitimacy that we focus a significantly higher share of the budget on meeting today's challenges: fostering an innovative and competitive economy, the fight against climate change, migration and security. We therefore need to spend a smaller share on established policies and we must also truly contain administrative spending by aligning it to national realities.

A budget of 1 per cent will lead to an increase in the contributions of all member states. Currently, more than two-thirds of the budget is redistributed. That means the financial burden of the union is increasingly being put on the shoulders of a small number of member states, including ours.

For decades, Brussels has recognised that some countries foot a disproportionate share of the EU's financing. But the European Commission is proposing to let this system of rebates run out. That means our four countries plus Germany would end up financing 75 per cent of net payments to the EU budget. We are ready to pay significantly more to the EU than we get back. We benefit greatly from being a member of the EU and the single market. However, there are limits. We insist on permanent net corrections to prevent excessive budgetary imbalances and achieve a fair, sustainable outcome.

We are confident that it is possible to reach an agreement on an ambitious and modern budget that devotes at least 25 per cent of its spending to climate action. It must also tie spending to conditions supporting the effective implementation of EU-wide policy objectives and the upholding of the rule of law. We trust that the new council president Charles Michel will help us achieve such an agreement in a timely manner.

Sebastian Kurz, chancellor of Austria. Mark Rutte, prime minister of the Netherlands, Mette Frederiksen, prime minister of Denmark, and Stefan Löfven, prime minister of Sweden, co-wrote this article.