A European Union summit came to an abrupt end on Friday as leaders failed to reach an agreement in regards to a long-term budget 2021-27. The two-day standoff was between poorer nations and so-called 'frugal' nations that wanted to rein in spending, according to reports.
A compromise plan by Summit chairman Charles Michel was rejected by both the camps during a gathering of 27 EU leaders. Deciding on a 7-year budget is always a challenge but Britain's exit from the European Union has resulted in a deficit of € 75 billion at a time when Europe is facing many challenges like climate change and migration.
A rift has been created between countries in the north and south, between east and west, and between more developed and less advanced economies when it comes to deciding the budget and how to distribute it.
According to reports, Denmark, Austria, Sweden and the Netherlands, who are being called the 'frugal four', want the budget to be to drop to as low as 1% of gross national income. On the other hand, poorer member states and beneficiaries of a joint budget are asking for the budget to bet set at 1.074%. This would be equivalent to € 1.09 trillion.
Summit chairman Michel's proposal would have capped joint spending at 1.069% of the continent’s economic output. The proposal was immediately rejected by the leaders.
While speaking at a news conference after the summit, Michel said that it was not possible to reach an agreement now and that the leaders needed more time.
The long-term budget will decide the fate of key European Union projects from supporting farmers to poorer regions across the bloc, Europe is also facing many challenges that would also be addressed by the budget, like the financing of migration and climate change projects.
(Image Credit: AP)