As the EU member states imposed restrictions to protect their citizens from the COVID-19 virus, many businesses across the continent took a strong economic hit. To help with their struggle, EU temporarily loosened restrictions on state aid.
As EU leaders struggle to agree on a post-pandemic reconstruction strategy, the European Commission plans to make the EU’s next 7-year budget a part of the recovery plan. However, it seems increasingly unlikely that a consensus regarding its precise form will be found before the end of the year.
The debate on the next EU budget becomes heated. The northern countries want to limit the cohesion funds, while Central and Southeast countries insist on the same level as previously. Germany, the EU’s biggest contributor, is prepared to accept a bit more than a per cent of GNI.
According to the economists at the Bruegel Institute, the future EU budget, including new tasks in the area of security, migration and protection of external borders, requires greater funding and changes in the structure of assistance programs.