World News

Game is on again between France and Germany as EU spars over budget

By Michel Rose and Gabriela Baczynska

BRUSSELS (Reuters) – Angela Merkel and Francois Hollande sealed a breakthrough deal on the European Union’s last joint budget in 2013, negotiating in a backroom of a Paris stadium where Germany and France were facing off in a friendly soccer game.

“We did that in a room with concrete walls inside the Stade de France,” said a French diplomat who was present for the talks between the leaders of the two top EU powers. “We were negotiating there for an hour, and sometimes we could hear a huge roar coming from the 50,000 people in the stadium.”

Fast forward to 2020 and the EU is again squabbling over its budget. This time around, Merkel has Emmanuel Macron across the table.

“Germany is not content with the current state of negotiations because we believe that among the net contributors the right balance has not been struck,” Merkel said on Thursday ahead of talks among the 27 EU national leaders in Brussels.

Among competing charts and figures produced by EU capitals to show they should be paying less but getting more, a recurring trend shows Berlin could end up being considerably worse-off compared with 2014-20, while Paris could see some gains.

“The overall feeling is that the proposal is very preferential for France. It gains a lot, while Germany loses a lot,” a senior diplomat from a smaller member state said of the budget blueprint leaders will discuss in Brussels on Thursday.

Capping the EU’s joint spending at 1.074% of the bloc’s gross national income, the proposed budget was prepared by the chairman of EU summits, Charles Michel, a former premier of Belgium, a close French ally.

“There are plenty of elements that address French concerns first and foremost,” said a second diplomat from another country. A third person spoke of a pro-French bias in the numbers.

Despite a gaping hole caused by Brexit and the loss of British contributions, France – the second-largest EU economy – would retain generous support for its crucial agricultural sector and farmers.

Germany – the EU’s biggest economy – is facing calls for much higher contributions to plug the Brexit hole and demands to end rebates that have so far reduced its payments. Berlin also wants to reroute more money to new challenges from managing migration to tackling climate change.

Asked to comment, a French diplomat involved in the negotiations said: “That’s the spin from Germany and the north.”

The discussion comes at a time when Macron is already enjoying growing influence on EU affairs, largely due to Brexit. He was instrumental in assigning the bloc’s top jobs last summer, running the bloc’s foreign policy on Iran and Western Balkans, as well as talks with Britain.

Back in 2013, the other French diplomat reminisced about the soccer game, which Germany won 2-1.

“The deal in the end was that Germany accepted all our priorities, and we accepted that they win the game,” the diplomat joked.

This time around, for now, the game is still on.

(Reporting by Gabriela Baczynska, Michel Rose, Sabine Siebold, Writing by Gabriela Baczynska; Editing by Toby Chopra)