Author: Mehreen Khan, Jim Brunsden and Michael Pee
Posted on: Financial Times| February 23rd, 2018


Angela Merkel’s plans to use EU funds to help integrate migrants hit a wall of opposition on Friday, as European leaders embarked on their first summit debate on the fraught subject of the union’s next long-term budget.
The German chancellor’s proposal to link EU money to migration policy — by rewarding countries that have taken in a sizeable population of refugees — was roundly criticised by Berlin’s traditional budget allies in Austria and Luxembourg, as well as the EU’s newer eastern member states. Friday’s summit was the first time that leaders have grappled with how to overhaul the bloc’s next long-term budget.
It faces a €15bn-a-year gap after the UK leaves. EU leaders also discussed whether or not they should support the system that bought Jean-Claude Juncker to power as European Commission president in 2013 when his successor is appointed next year.
The so-called “lead candidate”, or Spitzenkandidaten, system ties the commission job to the result of the European Parliament elections but has been criticised for giving too much power to MEPs to decide on one of the EU’s most influential posts. Leaders on Friday rejected automatically approving the candidates to emerge from the parliament elections next year.
“There was unanimity to say that there is no automaticity,” said Emmanuel Macron, the French president and one of the strongest critics of the Spitzenkandidaten system. Angela Merkel, Germany’s chancellor, said that leaders could not automatically approve the parliament’s choice as there was likely to be no clear winning party from the European elections.
On the budget, Germany and other big net contributors, such as Sweden and the Netherlands, are pushing for tougher conditions attached to the cash, wanting to link it explicitly to respect for EU policies on the rule of law, structural reform, and welcoming migrants during the refugee crisis in 2015.
But Berlin’s proposal to divert parts of the large “cohesion funding” budget, which has traditionally been used to develop the poorest parts of Europe, to measures on refugee integration provoked a backlash.
Dalia Grybauskaite, Lithuania’s president, said cohesion funding was for “better convergence, not for anything else”. Sebastian Kurz, Austria’s chancellor, said the budget should bolster Europe’s external border controls rather than rewarding countries that host migrants. “Solidarity is much more than sheltering refugees,” he said.
Poland, Hungary and other eastern member states are the biggest recipients of regional funding, which makes up more than a third of the €1tn EU budget. It pays for infrastructure projects and skills training. Xavier Bettel, Luxembourg’s premier, said the German plan risked stoking populism. “If we link the funds to migration questions, then we’ll be punished afterwards — not by the governments but the people,” he said.
In a position paper drawn up in January and circulated in Berlin’s ministries, the German government said that cohesion funding should also help governments that “have assumed responsibility for taking in and integrating beneficiaries of international protection of migrants with a right to stay”.
Germany has taken in more than 1m, mainly Syrian, refugees since the height of the refugee crisis. Warsaw and Budapest have fiercely resisted Brussels’ mandatory quotas. “Solidarity cannot be a one-way street,” Ms Merkel told the German parliament ahead of the summit.
Conditionality is one of the most sensitive topics in the budget battle, because EU governments are divided over the size and priorities of the next budget, which will run from 2021-2027. France is more receptive to the German plan, and is pushing for countries also to consider tying budget cash to a country’s labour market standards and its tax policy.
Mr Macron called for “visibility and clarity” on how the budget should be tied to EU policy. “I think it would be a matter of good sense to hold the payment of a number of funds when there is a breach of our values” he said. “If European money is being used to walk away from the rule of law it’s a breach of the initial condition of joining the European Union.”

Read at: