The European budget will be the most important political topic of Croatia's Council of the European Union presidency because it will impact all the polices of the 27-member bloc, Prime Minister Andrej Plenkovic said on Thursday, adding that he expected "an appropriate compromise" to be reached.

Aside from the other four priorities of the Croatian presidency – a Europe that grows and develops, a Europe that connects and a Europe that is secure and influential globally – Plenkovic also singled out “the concrete, big political topics that will attract a lot of media attention and demand the political engagement of Croatia and the other member states,” including the 2021-27 Multiannual Financial Framework (MFF).

“Politically, the MFF is without a doubt the most important dossier Croatia will deal with in the months ahead,” he said, adding that there was little time and that the European budget must be adopted this year.

This means the adoption of 45 laws proposed by the European Commission in cooperation with the European Council and the European Parliament, Plenkovic told the press.

The 2021-27 MFF will impact all Union policies and their financing – agriculture, rural development, fisheries, the cohesion policy, and new challenges such as migration, security, climate change or innovation.

According to a May 2018 proposal from Jean-Claude Juncker’s Commission, the budget should be at 1.114% of the gross national income of the 27 member states. The dozen most developed countries which are net contributors want a smaller budget, while the rest, who are net recipients, want to continue to receive appropriate funding for the cohesion policy and agriculture. The European Parliament wants the budget to be 1.3% of the gross national income.

“The compromise that need to be found must strike a balance between the Commission’s initial proposal, the positions of ten countries and those which want more money, and the EP’s position,” Plenkovic said.

European Council President Charles Michel has been formally tasked with coordinating negotiations on the MFF. In this context, he is more neutral than any presiding member state and Croatia, Plenkovic said, will help so that an appropriate compromise is reached.

Croatia “has a clear and strong national interest in receiving from the total budget in the next seven years funds which will resolve our priorities,” he said. “In that context, we want the continuation of financing for the cohesion policy, the agricultural policy and the rural development policy, but also to ensure funds for other challenges such as security and preventing illegal migration.”

Plenkovic is confident a compromise will be reached that will enable the Commission to carry out ambitious plans while retaining traditional policies.

“The MFF must be good for the whole Union and see to the specificities of every member state,” he said, adding that, as the youngest member state Croatia had the least time to “catch up” with the rest of the EU.

He is confident Croatia will be able to better articulate the importance of the cohesion, agricultural and rural development policies which are important for a balanced development of the majority of the member states.

Introducing the euro

Plenkovic went on to say that Croatia had prepared a strategy for introducing the euro as its official currency.

We are going step by step, he said, adding that “through close dialogue with the Eurogroup and institutions we have prepared an action plan” which accompanies the process of entering the European Exchange Rate Mechanism II.

“We want to complete that plan by the end of our presidency and for an appropriate decision at the Eurogroup level to be made possible during the German presidency so Croatia can become part of ERM II, a mandatory step in the euro adoption process.”

Western Balkans summit

One of the big political topics of Croatia’s EU presidency will be a summit on the Western Balkans in May, initiated by Zagreb and aimed, Plenkovic said, at stepping up the pace of the relations between Southeast European countries and the EU.

“Our political goal in consultations with the Commission and the member states” before the summit is to find a way to open accession negotiations with Albania and North Macedonia, he added.

Brexit

Brexit is a political topic that will be on the agenda this month. Plenkovic expects an orderly Brexit on January 31, after which, during February, Croatia, the Council and the Commission have to coordinate a draft comprehensive negotiating framework for future relations.

“That’s our job and we are already working on it with (EU chief Brexit negotiator) Michel Barnier. “It’s envisaged that those relations be negotiated from February 1 until the end of the year. Ideally, we will make our contribution and the process will end during the German presidency.”