Key facts
- Ten EU countries, including France, Italy, and Spain, oppose the European Commission's plan to link EU payments to policy reforms in the next seven-year budget.
- The proposed budget is worth nearly €2 trillion and is currently being negotiated by national capitals.
- Critics fear the "cash-for-reforms" model could empower national governments at the expense of regions and lead to imposed reforms.
- The model was previously tested in the EU's post-COVID Recovery and Resilience Facility (RRF).
- Luxembourg has already voted against the budget blueprint over opposition to reform conditionality.
Ten European Union countries, including major contributors like France, Italy, and Spain, have voiced opposition to a European Commission proposal that would link EU payments to policy overhauls in the bloc's next seven-year budget. The plan, part of the €2 trillion 2028-2034 budget negotiations, requires member states to meet various conditions, potentially including sensitive reforms like raising the retirement age, to receive funding.
During a meeting of EU ambassadors, the 10 nations argued that the "cash-for-reforms" model could empower national governments at the expense of regions and lead to the EU imposing reforms without political backing. Critics, such as Luxembourg, have stated that making European money dependent on implementing recommendations could fuel populism. Belgium has also raised concerns that the proposed model is not well-suited to its federal structure, where regions play a significant role in handling EU funds.
Conversely, the Netherlands defended the Commission's plan, and fiscally conservative states like Sweden and Denmark have long argued that conditionality can enhance economic efficiency in recipient countries. The model is based on the post-COVID Recovery and Resilience Facility (RRF), which linked payouts to reforms in areas such as judicial and pensions systems. While the Commission views the RRF as a success for compelling countries to adopt previously ignored recommendations, some EU countries have complained about delays and a lack of accountability caused by reform conditionality.