Socialists rebel against Commission’s plan to slash social spending in EU budget

BRUSSELS ― The Socialists are not just rebelling against European Commission President Ursula von der Leyen’s attempts to water down the EU’s green agenda — they are also out to stop her cutting budget funds for training young people and the unemployed.

Von der Leyen, from the center-right European People’s Party (EPP), needs the Socialists as part of a centrist coalition to pass legislation through the European Parliament. It is an ominous signal for her that the center-left is already gearing up to play hardball over the EU’s next budget, or Multiannual Financial Framework (MFF).

The fight is set to hinge on the social fund — worth €142.7 billion in the 2021-2027 budget — which is supposed to tackle poverty and support vulnerable groups. Von der Leyen wants to see that money channeled more to defense and scaling up industry.

“I do not understand an MFF, a community budget, without such an important fund as the European Social Fund,” said Iratxe García Pérez, leader of the Socialists and Democrats in the European Parliament during the last plenary session. 

“[The Commission] won’t have a blank check from the Socialist group,” she warned, hinting the fund will be a red-line in negotiations. She added to POLITICO: “We need to adapt to new challenges, and competitiveness is part of it, but not at the cost of leaving behind the EU’s social cohesion. Farmers, industry and business also benefit from social spending.”

The Socialists, the second-largest group in the European Parliament, accuse the center-right-dominated EU executive of railroading its pro-business and deregulation agenda into the next seven-year budget. 

Last week, Socialists and liberals threatened to pull the plug on von der Leyen’s informal pro-EU majority after she controversially sided with the far right in canceling an anti-greenwashing law.

Inside the Berlaymont, the Socialist commissioner for social rights Roxana Mînzatu ― who is in charge of the European Social Fund — is fighting a rearguard battle to save it.

“I do not understand an MFF, a community budget, without such an important fund as the European Social Fund,” said Iratxe García Pérez. | Ronald Wittek/EPA

Mînzatu and her three fellow Socialist commissioners, however, are outnumbered by 14 commissioners from the EPP who are keen to steer the EU’s €1.2 trillion cashpot towards new priorities such as defense and industry. 

EU commissioners from all parties are lobbying to secure greater control and funding for their programs ahead of the presentation of the budget proposal on July 16. 

Simplification and its critics

The Commission intends to lump dozens of funds into a national and regional plan that links payments to the completion of economic reforms. 

Supporters say this system will reduce complexity and make it easier for countries to spend the EU’s money. 

But critics warn that this is a smokescreen to cut the EU’s funds, and shuffle money away from priorities such as regional development and social cohesion.

“The question you have to ask in deliberating any new structure for the MMF is how can the Commission manage, sway or control that governments will spend the EU funds on the right policy priorities, which are not always necessarily the most attractive or [visible]?” said a Commission official.

Mînzatu supports attaching a price tag to the social fund in the new budget to compel governments to actually spend the money on social policy. 

Inside the European Parliament, the EPP is also in favor of ringfencing specific money pots ― although the center right is more interested in farmers’ subsidies than social programs.

“We cannot have farmers competing for funds for highways or modernizing public transport or for making buildings or energy efficiency,” said lawmaker Siegfried Mureșan, the EPP’s point person for the budget talks. 

“The social fund will be defended by the European Parliament,” he added.