The budget moment of truth

There is talk of new momentum in the EU accession process. From the German Chancellor to the French President, most European political leaders now say they support EU enlargement. Recently, Commission President Ursula von der Leyen called enlargement an “investment in our collective security and freedom.”

When EU citizens think about enlargement, however, 37 percent are concerned about “costs to European taxpayers,” according to a recent Eurobarometer poll. Costs are the third most widespread concern, scoring just slightly below “uncontrolled migration” (40 percent) and “corruption, organized crime & terrorism” (39 percent). In Austria, Cyprus, Germany, and Belgium, costs even top the list of concerns.

Yet preliminary plans for the next EU budget (2028-2034) do not mention costs of enlargement. They set aside €43bn for pre-accession funds and €100bn for a “Ukraine reserve,” but include no provisions for new members. The European Commission notes that the EU budget “can be revised when the timing of enlargement is known.” The message is clear: the EU is not seriously preparing to admit new members within the next decade, except perhaps one or two small countries like Montenegro, Albania or Moldova whose accession would carry only marginal financial implications. This casts all the encouraging statements about EU enlargement in a questionable light.

A decade of proliferating bilateral blockages and long-standing reservations about future enlargement in several EU member states has already led to a dramatic erosion of the accession process’s credibility. This has weakened reformers in accession countries and strengthened anti-European populists of dubious democratic credentials who can claim that the EU is not a reliable partner.

Those who want to inspire accession countries to conduct reforms, improve the rule-of-law and strengthen democratic institutions, need a different message: The EU must make clear that the door is open to countries that implement ambitious reforms.

Allocating funds for new members in the next EU budget is crucial to restoring credibility. Fortunately, costs are modest.

By far the largest chunks for new members arise from their participation in the EU’s agricultural and cohesion policies. A comprehensive study commissioned by the European Parliament’s budget committee calculated the costs of admitting nine new members: Ukraine, Moldova, Georgia and the six Western Balkan states. The study found that costs for agricultural policy and cohesion funds could be maintained at current levels if existing EU members accepted funding cuts. To achieve this, all 27 members would need to accept a cut of around 15 percent in agricultural policy funding, while 15 older EU members would need to accept a 24 percent reduction in cohesion funding.

But even without cutting funding levels for current members, the additional costs would be manageable. Looking at the pace of reforms, only tiny Montenegro is on track to join before 2030. Thus, the next budget could credibly forgo funds for new members in the first three years (2028-2030) and only provide them for 2031 to 2034. Moreover, agricultural payments could be introduced in phases, as in the large accession round of 2004. At that time, new members received agricultural payments of only 25 percent of normal level in the first year. Payments were then gradually adjusted over the following decade.

Taking estimates from the aforementioned study and applying such a phase-in period for agricultural funds, the annual costs for nine new members would amount to €13.4-14.7bn. These would be reduced by an estimated €5.6bn in contributions of these new members to the EU budget, resulting in a maximum annual net cost of €8-9bn. This is equivalent to around three percent of the planned annual EU budget.

Importantly, as the European Commission’s annual reports about reform progress reveal, only a few of these countries will manage to meet accession conditions by 2031. Many will not be ready even in 2034. Actual costs, therefore, will be much lower. Providing funds for new members is primarily not about actual costs, but about sending a signal.

The reforms necessary for accession are challenging and far-reaching. They require the full commitment of tens of thousands of civil servants and tough political compromises. It’s like in sports: you can’t win if you don’t believe you can.

Will defenders in Ukraine, civil servants in Moldova and reformers in the Western Balkans believe that their countries have a future as EU member states and that their struggle, their commitment is worthwhile? Allocating money for new members in the next EU budget would boost their morale. No amount of grand speeches and ceremonious announcements can compensate for the failure to do so.n

A first version of this text appeared in euobserver.