President Nikos Christodoulides on Friday hailed Cyprus’ submission of a proposal for the European Union’s next multiannual financial framework – the bloc’s budget for the period covering the years between 2028 and 2034 – saying the submission marks a “significant milestone” in negotiations.
He pointed out that the proposal, known as a “negotiating box”, contained “concrete figures” for “the first time” in deliberations for the budget, and said that it “reflects compromise, ambition and flexibility in strengthening Europe’s competitiveness, security, resilience, and strategic autonomy”.
“This marks the beginning of a substantive phase in the negotiations, with the shared objective of reaching an agreement by the end of 2026,” he said.
Later on Friday, European Affairs Deputy Minister Marilena Raouna, who had presented the proposal on Thursday, described it as both “mature” and “balanced”, as well as “a decisive, necessary step towards reaching a timely agreement”.
“This is the result of months of intensive work, transparency, and continuous engagement with all member states as true honest brokers,” she said.
Cyprus’ proposal foresees a budget which is more than €32 billion smaller than that which was proposed by the European Commission last year, with billions wiped off plans for the coming seven-year period.
The largest proportion of the budget will be allocated to the budget’s “heading one” which brings together policies related to cohesion, agriculture and fisheries, social, and migration policy, with €942.1bn allocated to this area. The commission had foreseen that €946bn be allocated.
However, within that budget, Cyprus has proposed that the EU’s cohesion budget be largely ringfenced and has also shielded areas such as regional development and agriculture from major cuts.
This is seen as a victory for southern and eastern net recipient member states and a rebuff to the bloc’s north and west, which would rather change the EU’s direction and offer more funds to matters such as defence and competitiveness in the stead of cohesion.
Defence and competitiveness feature in “heading two”, with Cyprus planning to allocate €8bn fewer than what the commission had planned to allocate, amounting to a combined total of €199bn.
The budget’s “Heading 3” foresees €182.5bn worth of funding for a “global Europe” – €7.5bn less than was foreseen by the commission – while “heading four” concerns administration and the budget for the operational running of the EU, where both Cyprus and the commission allocated €104bn.
However, while the Cypriot government’s aim was to find a compromise, some member states have already lambasted it for not going far enough in its efforts to reduce the EU’s budget and for electing to shield agriculture and cohesion, possibly at the expense of defence and competitiveness.
Dutch Finance Minister Eelco Heinen, for example, described the proposal as a “no-go box”, and said the Cypriot government’s plans were “unaffordable” and “unbalanced”, while also setting the “wrong priorities”.
News website Table Briefings also quoted another diplomat from another member state which is a net contributor to the EU’s budget as having aid that Cyprus’ proposals are “very far from any landing zone”.
Ambassadors from the bloc’s member states are expected to begin deliberating the proposal over the weekend, before heads of state and government will address it at the European Council summit in Brussels, which will take place next Thursday and Friday.
At present, it is believed that while a majority of member states may be sympathetic to Cyprus’ proposal, those against it, such as the Netherlands, account for almost two thirds of the EU’s economic power and, crucially, budget contributions.
Ireland will succeed Cyprus as the holder of the Council of the EU’s rotating presidency at the end of this month and is expected to present a second “nego box” in October. Despite expected internal wranglings over the coming months, it is still hoped that an agreement on the budget may be reached by the end of this year.
