Poland on Thursday warned that a eurozone budget proposed by France and Germany to bolster the 19-member currency bloc could spell the end of the European Union should it drain resources from the shared budget of all members. France's President Emmanuel Macron on Tuesday won German Chancellor Angela Merkel's backing for eurozone reforms, including a vaunted budget for the bloc.
Macron said it will be a "real budget with annual revenues and spending" with its own governance structure, adding that Paris and Berlin hoped to have it in place by 2021. Merkel said that funding mechanisms were also up for discussion with other eurozone members, suggesting that it could involve regular transfers made by individual countries, a tax on financial transactions or funds from the EU.
The size and other details still remain sketchy and its creation could still face resistance from other members. Krzysztof Szczerski, chief of staff to Poland's President Andrzej Duda, insisted on Thursday that "if the eurozone states decide to spend extra money for this (eurozone) budget, then that's their internal matter, but if it were to be created at the expense of their contributions to the general (EU) budget, then that would be the end of the EU."
"It would de facto mean that the eurozone is going its own way and that it wants to operate outside the general framework of the EU," Szczerski told the Polish PAP news agency. He also warned about deep imbalances that could come about should the proposed eurozone budget be adopted in tandem with the European Commission's draft post-Brexit budget for 2021-2027. It proposes spending more on southern eurozone members like Greece and Italy hit by the economic and migrant crises and less on increasingly wealthy eastern states like Poland and Hungary.
"If the EU tries to change the priorities of this (draft) budget to move more funds to the southern members that are in the eurozone, and additionally wants to help them with money under a separate eurozone budget, it is creating a very serious budgetary and economic policy imbalance," Szczerski told the PAP.
European sources have said that Poland and Hungary would receive more than 20 percent less in cohesion funds in the next budget, compared to the current 2014-2020 spending plan. The Polish government has already denounced the proposed reduction as "unacceptable", a stance echoed by other eastern EU members including the Czech Republic and Latvia.