Why the battle over the EU’s next €1.2tn budget has already begun

Good morning. The Alternative for Germany has won elections in the eastern region of Thuringia, the first time a far-right party has come first in a state poll in Germany’s postwar history. Here’s what this political earthquake means for Berlin and Brussels.

Today, I explain the opening salvos in the mammoth battle that lies ahead over shaping the EU’s next budget, and our Netherlands correspondent reports on the Dutch government’s refusal to send mpox vaccines to Africa.

Breaking the budget

Brussels gossip may at the moment be focused on the lobbying for the roles in Ursula von der Leyen’s second commission, but the influence battle that really matters is of an altogether more base nature: money. €1.2tn, in fact.

Context: The EU agrees its shared budget every seven years. The existing one runs out in 2027. It needs unanimous support from member states, who fund it, and the wrangling over how it’s allocated takes years.

The 2028-34 budget is set to be one of the most consequential ones in the bloc’s history, and almost certainly the most bitterly fought over. Negotiations have already begun in the European Commission’s corridors of power. Discussions will very soon erupt out into the open as capitals enter the fray.

Von der Leyen’s opening gambit is a revolutionary one: overhaul support for less developed regions — known as cohesion funds — by making them conditional on economic reforms, rather than simply sending the biggest cheques to the poorest areas.

Proponents see two key advantages. One is theoretical: the funds should be more efficient in creating economic growth. The second is mercenary: not everyone will meet the conditions, so cash will be saved.

Opponents see two huge flaws. One is political: A central government could starve a poor, opposition-run region of cash by refusing to meet the conditions. The second is on principle: poorer member states joined the EU with the trade-off of opening up their economies in exchange for these funds, and that deal mustn’t be fiddled with.

The argument may be won by the brutal reality that all capitals want the EU budget to be spent on more things, but very few want to make it larger. Hence why “efficiency” is an early von der Leyen 2.0 buzzword.

Many capitals are jostling to appoint the next budget commissioner and influence the multiannual financial framework, even if senior commission officials empowered by a second-term president have already begun drafting large chunks of it.

Not that the commissioner, by the time they are sworn in, will be redundant: Their job will be to somehow sell the finished proposal to all 27 member states and endure two years of raging debate.

Chart du jour: Luxury problems

Ireland faces a situation most other countries would love to have: an €8.6bn surplus and an economy that grew five times faster than expected last year. Should it spend or save its windfall?

Going Dutch

Geert Wilders vowed to put Dutch people first when he won last year’s election. His government is sticking to that pledge by refusing to send mpox vaccines to Africa, writes Andy Bounds.

Context: European health commissioner Stella Kyriakides last month urged EU member states to donate mpox vaccines to African countries suffering a surge of the disease, previously known as monkeypox. At least 12 African countries, including Kenya and Uganda, have reported outbreaks.

The World Health Organization has declared it a global public health emergency and urged rich nations to help Africa before the disease spreads worldwide.

In the Netherlands, where Wilders’ far-right Freedom party controls the health department as part of a four-way coalition, health minister Fleur Agema has refused to send any of the country’s 100,000 mpox vaccine doses to Africa, even though some will expire next year.

Agema argued that the Netherlands itself might need the vaccines, ignoring advice from the Dutch national health institute that it would be better to tackle the disease in Africa to ensure it does not take hold in Europe.

The coalition appears split on the issue. The centre-right New Social Contract has backed donations. “The idea is to do what we can to contain the mpox outbreak at the source,” a party spokesperson said.

Other EU member states have heeded the call, as well as the commission’s Health Emergency Preparedness and Response Authority, which has given 215,000 doses.

Germany and France have also sent 100,000 each, and Spain 500,000: a fifth of its stockpile. Madrid wants Brussels to propose that all member states donate the same proportion of their supplies.

There are other countries that have yet to publicly announce their donations, with an update expected this week, according to a person familiar with the situation.

What to watch today

1. Informal meeting of EU European affairs ministers in Budapest.

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