https://sputnikglobe.com/20230829/eu-budget-battle-shows-euroscepticism-and-ukraine-fatigue-rising-1112971757.html
EU Budget Battle Shows Euroscepticism and Ukraine Fatigue Rising
EU Budget Battle Shows Euroscepticism and Ukraine Fatigue Rising
Sputnik International
Divisions are brewing among EU member states as the bloc's leadership seeks a total of €86 billion ($93.2 billion) in additional funding, including financial support for Ukraine and salary increases for EU bureaucrats.
2023-08-29T18:58+0000
2023-08-29T18:58+0000
2023-08-29T18:57+0000
european union (eu)
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Brussels’ request for additional funding to fill the gaps of the EU budget and provide assistance to Ukraine has sowed discord among EU leaders who are seeing their domestic budgets dwindling and skepticism over the Kiev regime's ability to win, according to the Western mainstream press.EU member states have called for reductions and a longer approval timetable, while Ukraine’s botched counteroffensive makes war skeptics in both the Old Continent and the US even more doubtful about additional military support.The EU's €86 billion package consists of €66 billion ($71.6 billion) for the union's budget and €20 billion ($21.6 billion) in military assistance for Kiev (stretched over four years). The package also contains €17 billion in grants for Kiev, while around €19 billion are meant to cover interest costs on joint EU borrowing; about €2 billion have been requested for the EU administration's salary increases; €15 billion would be spent on issues related to rising migration and funding for external countries; and €10 billion would cover the EU's other endeavors.Per Germany and the Netherlands, it's a tricky time for Brussels to increase its internal spending when its member states are tightening their belts due to rising interest rates, economic slowdown and still swirling inflation."While the increase to salaries 'only' accounts for €2 billion [$2.2 billion] of this package (compared to a reported €19 billion to cover higher interest on loans), there is definitely a perception of European 'fat cat' officials in society at large, so increasing their salaries, while many others have seen their purchasing power drop dramatically due to inflation, will certainly not be popular, and this has become a bit of a sticking point."The Eurozone has yet to overcome inflation hurdles, with some nations, like Italy, suffering from the European Central Bank's (ECB) aggressive rate hikes or facing nothing short of deindustrialization, like Germany, over the EU's energy embargo slapped on Russia in the aftermath of the latter's special military operation in Ukraine.While Rheinmetall AG apparently feels good, many other German companies are suffering from energy uncertainty. Some big German enterprises, including BASF and Lanxess, closed facilities and relocated their businesses, opening the door to deindustrialization.As per the International Monetary Fund (IMF), Germany is the only G7 economy which is projected to contract in 2023. What's more, the nation has already slid into a technical recession and is lagging behind its Western rivals in terms of economic growth. Thus, unsurprisingly, Berlin has no appetite at replenishing the EU coffers at the expense of its dwindling national wealth.Hence, Berlin's opposition to Brussels' latest hefty package.Meanwhile, inflation in the Eurozone dropped to 5.3% in July, down from 5.5% in the previous month, but is still higher than the European Central Bank's 2% threshold.Still, even though the relatively warm winter of the 2022/2023 helped Europe to weather its own energy sanctions on Russia, it's unclear what the future has in store for the Old continent during the 2023/2024 winter season.Tom Luongo, a geopolitical and financial analyst, suggested in his July interview with Sputnik that Europe's financial cushion could collapse very quickly. According to him, an impending crisis may soon flood "the Potemkin villages" of the EU economy.Per Luongo, there's a greater chance that the next global recession, if it does take place, would emanate from Europe due to a commodity wave, prompting a new wave of inflation, and the banking collapse. The first harbinger of the impending trouble was Switzerland's Credit Suisse bank collapse in March 2023.While the future of the European economic bloc is still murky, one thing is clear: the EU is not expecting the Kiev regime's victory any time soon and needs to prolong its agony as long as possible.
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european union, eu budget, eu aid to ukraine, ukraine failed counteroffensive, war in ukraine, euroscepticism, ukraine fatigue, eurozone inflation, germany recession, germany deindustrialization, eu's russia energy embargo, eu sanctions against russia, eu energy crisis, eu member states tightening belts, eu 86 billion euro budget, divisions in eu
european union, eu budget, eu aid to ukraine, ukraine failed counteroffensive, war in ukraine, euroscepticism, ukraine fatigue, eurozone inflation, germany recession, germany deindustrialization, eu's russia energy embargo, eu sanctions against russia, eu energy crisis, eu member states tightening belts, eu 86 billion euro budget, divisions in eu
EU Budget Battle Shows Euroscepticism and Ukraine Fatigue Rising
Divisions are brewing among EU member states as the bloc's leadership seeks a total of €86 billion ($93.2 billion) in additional funding, including financial support for Ukraine and salary increases for EU bureaucrats.
Brussels’ request for additional funding to fill the gaps of the EU budget and provide assistance to Ukraine has sowed discord among EU leaders who are seeing their domestic budgets dwindling and skepticism over
the Kiev regime's ability to win, according to the Western mainstream press.
EU member states have called for reductions and a longer approval timetable, while Ukraine’s botched counteroffensive makes war skeptics in both the Old Continent and the US even more doubtful about additional military support.
The EU's €86 billion package consists of €66 billion ($71.6 billion) for the union's budget and €20 billion ($21.6 billion) in military assistance for Kiev (stretched over four years). The package also contains €17 billion in grants for Kiev, while around €19 billion are meant to cover interest costs on joint EU borrowing; about €2 billion have been requested for the EU administration's salary increases; €15 billion would be spent on issues related to rising migration and funding for external countries; and €10 billion would cover the EU's other endeavors.
Per Germany and the Netherlands, it's a tricky time for Brussels to increase its internal spending when its member states are tightening their belts due to rising interest rates, economic slowdown and still swirling inflation.
"Essentially, what is happening is that the EU is asking for a top-up from member states for its own increased expenses, including increasing its own officials' salaries, as part of a total long-term budget plan that also includes aid to Ukraine," Dr. Roslyn Fuller, director of the non-profit think tank Solonian Democracy Institute and the author of the book "Beasts and Gods: How Democracy Changed Its Meaning and Lost Its Purpose," told Sputnik.
"While the increase to salaries 'only' accounts for €2 billion [$2.2 billion] of this package (compared to a reported €19 billion to cover higher interest on loans), there is definitely a perception of European 'fat cat' officials in society at large, so increasing their salaries, while many others have seen their purchasing power drop dramatically due to inflation, will certainly not be popular, and this has become a bit of a sticking point."
24 August 2023, 14:02 GMT
The Eurozone has yet to overcome inflation hurdles, with some nations,
like Italy, suffering from the European Central Bank's (ECB) aggressive rate hikes or facing nothing short of deindustrialization, like Germany, over the EU's energy embargo slapped on Russia in the aftermath of the latter's special military operation in Ukraine.
"Although Germany is the major economic hub of the EU, and has been particularly hard-hit by energy shortages, it is also a major weapons manufacturer, and thus spending on military aid is not bad news for the German economy. If you look at a company like Rheinmetall AG, for example, its stocks haven't been higher in the last quarter century than they have been since 2022," said Fuller.
While Rheinmetall AG apparently feels good, many other German companies are suffering from energy uncertainty. Some big German enterprises, including BASF and Lanxess, closed facilities and relocated their businesses, opening the door to deindustrialization.
As per the International Monetary Fund (IMF), Germany is the only G7 economy which is projected to contract in 2023. What's more, the nation has already slid into a
technical recession and is lagging behind its Western rivals in terms of economic growth. Thus, unsurprisingly, Berlin has no appetite at replenishing the EU coffers at the expense of its dwindling national wealth.
Hence, Berlin's opposition to Brussels' latest hefty package.
Meanwhile, inflation in the Eurozone dropped to 5.3% in July, down from 5.5% in the previous month, but is still higher than the European Central Bank's 2% threshold.
"Although any conflict is obviously a drain on resources, we have so far experienced a much softer economic downturn than anyone was expecting in early 2022. This is likely because Western states were flooded with money and had ultra-low interest rates during the early part of the pandemic. Savings rates were also very high during the pandemic. This created a huge financial cushion that allowed people to absorb the increased costs of energy and inflation far better than was expected," Fuller remarked.
Still, even though the relatively warm winter of the 2022/2023 helped Europe to weather its own energy sanctions on Russia, it's unclear what the future has in store for the Old continent during the 2023/2024 winter season.
Tom Luongo, a geopolitical and financial analyst, suggested in his July interview with Sputnik that Europe's financial cushion could collapse very quickly. According to him, an impending crisis may soon flood
"the Potemkin villages" of the EU economy.
Per Luongo, there's a greater chance that the next global recession, if it does take place, would emanate from Europe due to a commodity wave, prompting a new wave of inflation, and the banking collapse. The first harbinger of the impending trouble was Switzerland's Credit Suisse bank collapse in March 2023.
While the future of the European economic bloc is still murky, one thing is clear: the EU is not expecting the Kiev regime's victory any time soon and needs to prolong its agony as long as possible.
"Since the EU is locking in funding for four years, they clearly aren't planning on victory any time soon, and people eventually grow weary with protracted wars," Fuller stressed.
26 August 2023, 18:55 GMT
