Climate policy endures rough EU budget summit

By Sam Morgan
Jul 22, 2020

EU leaders agreed to slash funding for Just Transition policies at a crucial budget summit on Tuesday (21 July) and also watered down a set of green conditions that could hamper the bloc’s long-term climate efforts.

After nearly five days of negotiations, heads of state and government brokered a compromise on the EU’s next long-term €1.8 trillion mega-budget, which will include a €750 billion recovery fund to help countries worst-hit by the coronavirus pandemic.

Significant compromises had to be made in order for all 27 leaders to agree on the deal, which ranged from hefty cuts to certain EU programmes, increased rebates for net contributors and a smaller proportion of grants under the recovery fund.

Areas such as the bloc’s research scheme, Horizon Europe, a proposed solvency instrument and cash for neighbourhood and health policy, were all either stripped partially or completely of funding in the final agreement.

The European Commission’s flagship Just Transition Fund (JTF), designed to help carbon-intensive economies ditch fossil fuels, was not spared from cuts.

Its total budget fell from €40 billion to €17.5 billion after the ‘Frugal Four’ group of countries – Austria, Denmark, the Netherlands and Sweden, as well as Finland – pushed for a more balanced split between grants and loans, which meant there was less money available.