Above the rest of the process hangs Hungarian Prime Minister Viktor Orbán`s threat to block both the long-term budget and the reconstruction fund due to a new mechanism combining EU funding and respect for the rule of law. Some officials say Orbán is bluffing, but it`s too early to know if he will give in. Tuesday`s deal would save an additional €15 billion for budget programmes, including the Horizon Europe research programme, the Erasmus student exchange programme and the health programme, according to a Council statement. Of the €15 billion, €12.5 billion represents new funding, mainly from competition penalties imposed by the bloc. The rest of the money would come mainly from mixed money. “The EU has had the opportunity to lead a fair and green recovery from the coronavirus pandemic,” said Jeroen Kwakkenbos, a chief adviser at Oxfam. However, “the consensus reached today is not intoxicating at best. The agreed EU budget is not commensurate with the urgency and gravity of the crisis and the challenges ahead, and it will be to the detriment of man.” One of Parliament`s main demands was a legally binding timetable for the introduction of new sources of revenue for the bloc`s coffers, to ensure that the cost of borrowing for the Reconstruction Fund did not affect budgetary programmes. Following the Development of Budget plans by the Commission, the Council of Ministers proposed in July an amount of €1.07 trillion for 2021-27 and approved the €750 billion reconstruction fund proposed by the Commission, called next Generation EU.

The agreement must now be transposed into several laws. Some of them must again be approved by the European Parliament and the Member States in the Council. In some cases, the Council`s approval must be unanimous. The own resources decision, the legal basis for financing all EU expenditure, must also be ratified in all Member States. In most Member States, these are the national parliaments. “The budget, the reconstruction fund, new revenues and the conditionality of the rule of law are a package for us,” said Romanian MEP Siegfried Mureşan, vice-president of the European People`s Party group. “Parliament will only ratify today`s agreement if member states respect all parts of the agreement.” The European Parliament as a whole has yet to approve the seven-year budget and the Council must approve the budget unanimously. The Council will also have to unanimously approve – and the national parliaments must ratify it – a legal measure which is a precondition for the Bloc to start borrowing money for the new recovery fund. “I welcome this agreement on our recovery plan and on the next Multiannual Financial Framework,” she said.

“We must now continue to reach agreement on the next long-term budget and NextGenerationEU by the end of the year. It remains to be seen whether the ongoing negotiations between the EU and Britain for a post-Brexit trade deal will bring a drop in the bucket. It seems that these negotiations are to be concluded this year. “This agreement will allow us to strengthen specific programmes under the long-term budget for the period 2021-2027, including Horizon Europe, Erasmus+ and EU4Health,” said Budget Commissioner Johannes Hahn. BRUSSELS (Reuters) – Negotiators from the European Parliament and EU governments agreed on Tuesday on the details of the EU budget for the period 2021-2027, a decisive step in activating the Bloc`s €1.8 trillion (£1.6 trillion) stimulus package to make the economy greener and digitalr.