Briefing notes

Orbán calls current EU budget proposal unfair

The Friends of Cohesion Summit in Prague results in a declaration for a “fair” and “flexible” funding going into the next budget period

Following the  Friends of Cohesion Summit in Prague, PM Orbán laid the blame squarely on the outgoing European Commission for a budget that treated Hungary unfairly. The PM met with leaders of the other Visegrad countries (Czech Republic, Poland, and Slovakia), as well as the other countries in the Friends of Cohesion group: Estonia, Croatia, Malta, Slovenia, Bulgaria, Cyprus, Lithuania, Latvia, Romania, Italy, Portugal, and Greece.

Two main points by the Hungarian prime minister prior to the meeting had been that much of the EU funding given to V4 countries ends up back in Western states due to returns on corporate investments and that poorer countries should not receive less funding, simply because they are poorer, while richer ones receive more. 

“The poorer a country is, the more money would be taken away from them, while the richer a country is, the less,” Orbán had said.

Orbán also suggested that rebates should be eliminated, stating that you “get a completely unfair picture” when you recalculate a member state’s rebate taking into account the amount it pays into the EU budget in relation to its GDP. 

Cohesion funding also affects Hungary’s ability to achieve climate neutrality. In order for Hungary to be carbon-neutral by 2050, it will need to spend 2.5 percent of its GDP annually to implement needed economic reforms. Netherlands, on the other hand, will only have to spend some 0.5 percent of its GDP to do the same.

The 16 countries of the Friends of Cohesion group signed a statement calling for cohesion funds to remain unchanged in real terms for Multiannual Financial Framework (MFF) 2021-2027. They therefore asked that funding for the Cohesion Policy remain equal to that of the 2014-2020 MFF. The group also called for member states to be allowed to utilize funding for what they deemed necessary and to not be forced to allocate funds to pre-determined areas. 

The group declared the Cohesion Policy to be a critical EU investment tool for taking on the challenges of the next several years, such as climate neutrality, industrial transitions, and demographics, and that the budget reductions included in the next budget period pose a serious threat to their ability to do so. 

In their declaration, the signing countries call for a flexible and fair Cohesion Policy that serves to contribute to and preserve a “strong, safe and prosperous Europe,” a policy that enables “growth, jobs, investments and competitiveness across the EU and of the EU in [the] global market, while combating inequalities within and among Member States through Treaty based economic, social and territorial cohesion objectives.”

There was additionally a focus on helping further develop rural areas and the agricultural sector.

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