Costa urges protecting EU cohesion funds as Irish plan trims 2028-2034 budget by 8%

A revised budget framework with an 8% cut

On 12 October the Irish presidency of the Council of the European Union proposed cutting the Commission's proposal for the multiannual budget covering 2028 to 2034 by 8%, to a total of 1.62 trillion euros. Irish minister for European affairs Thomas Byrne presented the revised negotiating framework at a press conference in Brussels, describing it as equivalent to 1.16% of the EU's gross national income. The Commission's proposal stood at 1.76 trillion euros in constant prices (1.98 trillion in current prices), and the revised framework saves 141 billion euros against it.

Byrne said the cuts fall mainly on the Global Europe heading, reduced by 17%, followed by competitiveness, prosperity and security at 13%. Administration is cut by 8.8%, while cohesion, agriculture, fisheries and rural communities see the smallest reduction at 3%. National allocations were kept at the level of the June proposal, which Byrne linked to calls from most Member States to protect the Common Agricultural Policy and cohesion policy. The revised proposal also includes new own resources to finance the EU budget and will serve as the basis for negotiations between Member States.

Costa's three priorities at the opening

António Costa, president of the European Council, opened the inaugural session of the European Week of Regions and Cities and urged that cohesion policies not be sidelined in negotiations on the new budget framework. He named the housing crisis, the energy transition and the need for a less bureaucratic system as the continent's main challenges. On energy, he pointed to the Middle East crisis and its impact on energy supplies, calling for faster decarbonisation and greater independence based on renewable and nuclear sources. He said regions with more renewables already enjoy significantly lower electricity prices. Costa also said the difference in annual energy costs between a poorly insulated home and a well insulated one can reach 5,000 euros, and that temporary measures are needed to protect families and businesses while the Commission has already made proposals for immediate relief.

Housing and trust in democracy

Costa warned that the lack of affordable housing feeds disillusionment with democratic institutions, a crisis he said hits homeless people, low-income families, the middle class and young people. He said he placed the housing crisis on the European Council agenda for the first time in October of the previous year, and he listed Copenhagen, Lisbon, Dublin and Athens as cities facing the problem. Housing policy is primarily the responsibility of national, regional and local authorities, he said, while the EU can complement their efforts. SAPO reports that protests in 50 Spanish cities, with tens of thousands of participants, followed the eviction of an 87-year-old woman in Madrid, who later died.

Portugal's caution and the timetable to year-end

Portuguese Prime Minister Luís Montenegro told the Assembly of the Republic, during the preparatory debate for the European Council of 15 and 16 October, that Portugal is not in a position to be optimistic about the next multiannual financial framework. The Council's provisional agenda includes competitiveness, the framework, migration, defence and the conflicts in Ukraine and the Middle East.

We are not in a position to be too optimistic. There are many difficulties.

Montenegro pointed to the shrinking weight of cohesion and agricultural funds within the total budget, set against the growth of the competitiveness fund, and said Portugal's national contribution relative to its GDP is higher than that of the frugal countries. He said he had not yet received a reply to a letter, sent with the Spanish prime minister and the French president, calling for direct and dedicated support for the outermost regions. The target is an agreement by the end of the year, with an informal leaders meeting in November and a Council meeting in December.

Regions push back against centralisation

Luca Menesini, president of the Party of European Socialists group in the Committee of the Regions, said centralising European and cohesion policy is a wrong response to the challenges ahead because it denies the principle of subsidiarity. He said the Committee's report on the state of regions and cities shows that the strength of Europe rests in its territories. Menesini warned that if the Commission succeeded in getting co-legislators to adopt what it proposes, the Committee would have no choice but to use every institutional and legal tool available to reverse course, a path that could lead to the end of the EU as it is known.