By The Smartencyclopedia Staff & Agencies

The European Union has reached a landmark budget deal, adding an extra €64.6 billion to its common budget. However, as the dust settles, the fine print reveals the intricacies of the agreement forged among member states, each vying for their priorities amidst political pressures leading up to the European Parliament elections.

The negotiations, spanning months and culminating in a February 1st extraordinary summit, witnessed the lifting of Viktor Orbán’s monthlong veto under considerable pressure from fellow leaders. European Commission President Ursula von der Leyen hailed the outcome, emphasizing the challenging choices that led to a significant result.

The revised budget for 2021-2027, totaling €2,018 billion (including €806.9 billion for the COVID-19 recovery fund), will now receive an additional €64.6 billion. This figure marks a notable reduction from the initial proposal of €98.8 billion by the Commission.

Breaking down the budget top-up, key allocations and changes emerge:

1. Ukraine Facility: €50 billion
   The revised budget focuses on boosting aid for Ukraine through the establishment of the Ukraine Facility. This facility, earmarked for 2024-2027, aims to provide €50 billion to support Ukraine’s economy and essential services. It includes €17 billion in non-repayable grants and €33 billion in low-interest loans.
2. Migration Management: €9.6 billion
   Migration management, a shared priority, secured €9.6 billion to cover expenses related to border control, relations with the Western Balkans, and the hosting of Syrian refugees. The funds align with the goals of the New Pact on Migration and Asylum.
3. New Technologies (STEP): €1.5 billion
   The Strategic Technologies for Europe Platform (STEP) received €1.5 billion to support EU-made high-tech, particularly focusing on reinforcing the European Defence Fund (EDF).
4. Unforeseen Crises: €3.5 billion
   Addressing unforeseen crises, the budget allocated €1.5 billion for emergency aid and €2 billion for the Flexibility Instrument, allowing the EU to respond to various critical situations.
5. Interest Payments: Zero
   The budget review addressed interest payments related to joint borrowing, utilizing a three-step “cascade mechanism” involving existing provisions, underperforming programs, and financial envelopes before direct contributions from member states.
6. Redeployments: €10.6 billion
   Member states decided to shift €10.6 billion from ongoing EU initiatives, affecting programs such as Global Europe, Horizon Europe, assistance to displaced workers, agriculture and cohesion funds, EU4Health, and a special reserve for Brexit disruption.

While the total amount sums up to €64.6 billion, countries will contribute only €21 billion. The budget reallocation, particularly the €10.6-billion redeployment from ongoing initiatives, may stir reactions, notably affecting flagship research programs Horizon Europe and EU4Health.

A senior Commission official expressed concerns over the potential impacts and affirmed a commitment to follow legislative decisions. The changes, particularly to Horizon and EU4Health, are expected to face scrutiny from the European Parliament, requiring co-approval for the budget review.