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EU budget 2021: An annual budget focused on European recovery

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The Commission has today proposed an EU budget of €166.7 billion for 2021, to be complemented by €211 billion in grants and approximately €133 billion in loans under Next Generation EU, the temporary recovery instrument aimed at mobilising investments and kick-starting the European economy. Together, the annual budget and Next Generation EU will mobilise significant investments in 2021 to address the immediate economic and social damage caused by the coronavirus pandemic, kick-start a sustainable recovery and protect and create jobs. The budget is also fully in line with the commitment to invest in the future in order to achieve a greener, more digital and resilient Europe.

Once adopted, this will be the first budget under the new 2021-2027 multiannual financial framework and the first annual budget proposed by President von der Leyen‘s Commission.

Commissioner Johannes Hahn responsible for the EU Budget stated: “In these extraordinary times, the European Commission’s proposal mobilises unprecedented support. The annual budget 2021 will help hundreds of thousands of people, companies and regions to overcome the crisis and emerge stronger than before. To make it happen, we need an agreement on the long-term budget and Next Generation EU – a deal that will send a signal of confidence throughout Europe.”

The draft budget 2021, boosted by Next Generation EU, directs funds to where they can make the greatest difference, in line with the most crucial recovery needs of the EU Member States and our partners around the world.

The funding will help rebuild and modernise our Union, by fostering the green and digital transitions, creating jobs and strengthening Europe’s role in the world.

The budget reflects Europe’s priorities, which are relevant to ensure a sustainable recovery. To that end, the Commission is proposing to allocate:

–   €1.34 billion for Digital Europe programme for the Union’s cyber-defences and support the digital transition;

–   €3 billion for Connecting Europe Facility in an up-to-date, high-performance transport infrastructure to facilitate cross-border connections;

–  €575 million for the Single Market Programme, €36.2 million and €127 million respectively for the programmes supporting cooperation in the fields of taxation and customs;

–   €2.89 billion for Erasmus Plus to invest in young people, as well as €306 million for the cultural and creative sectors through Creative Europe;

–   €1.1 billion for the Asylum and Migration Fund and €1.0 billion for Integrated Border Management Fund to step up cooperation on external border management as well as migration and asylum policy;

–   €55.2 billion for the Common Agricultural Policy and €813 million for the European Maritime and Fisheries Fund, for Europe’s farmers and fishermen, but also to strengthen the resilience of the agri-food and fisheries sectors and to provide the necessary scope for crisis management;

–   €228 million for the Internal Security Fund and €1.05 million for the European Defence Fund to support the European strategic autonomy and security;

–   €1.9 billion for pre-accession assistance, to support our neighbours, including in the Western Balkans;

In addition, large part of the funds will go to the priority actions identified in connection with Next Generation EU, including:

–   €131.5 billion of loans and approximately €133 billion of grants can be provided to Member States under the Recovery and Resilience Facility, as part of Next Generation EU;

–   €17.3 billion for Horizon Europe, to increase European support for health and climate-related research and innovation activities, of which €5 billion under Next Generation EU;

–   €10.13 billion for InvestEU, to invest in sustainable infrastructure, innovation and digitisation. Part of the money will be for the Strategic Investment Facility, to build strategic autonomy in vital supply chains at European level;

–   €8.28 billion for the Solvency Support Instrument as proposed by Next Generation EU, to address the solvency concerns of viable companies from all economic sectors;

–   €47.15 billion for cohesion policy, to be complemented by €42.45 billion under REACT-EU as proposed under Next Generation EU. The money will go for employment subsidies, short time work schemes and youth employment measures; liquidity and solvency for SMEs;

–   €9.47 billion for the Just Transition Fund to make sure the transition towards climate neutrality leaves nobody behind, of which €7.96 billion under Next Generation EU;

–   €619 million for rescEU, the Union civil protection mechanism, to make sure the Union has the capacity to respond to large-scale emergencies;

–   €1.19 billion for EU4Health, the new health programme, which will equip our Union against future health threats; of which €1.17 billion from Next Generation EU;

–   €15.36 billion for our external partners through the Neighbourhood, Development and International Cooperation Instrument (NDICI) of which €3.29 billion under Next Generation EU;

–   €2.8 billion for humanitarian aid, of which €1.3 billion under Next Generation EU, for the growing humanitarian needs in the most vulnerable parts of the world.

The draft budget for 2021 is based on the Commission’s proposal for the EU’s next long-term budget as put forward on 27 May 2020. Once the European Parliament and the Council agree on the MFF 2021-2027, including Next Generation EU, the Commission will adapt its proposal for the 2021 budget accordingly through an amending letter.

It is essential that the draft budget is adopted swiftly so that hundreds of thousands of entrepreneurs, researchers, farmers, and municipalities across Europe can start benefitting from the funds, thus investing in a better future for next generations.

Background

The draft 2021 EU budget includes expenditure under Next Generation EU that will be financed from borrowing at the capital markets and the expenditure covered by the appropriations under the long-term budget ceilings which are financed from own resources. For the latter, two amounts for each programme are proposed – commitments and payments. “Commitments” refers to the funding that can be agreed in contracts in a given year; “payments” to the money actually paid out. The proposed 2021 EU budget amounts to €166.7 billion in commitments (-9.7% compared to 2020) and €163.5 billion in payments (+0.8% compared to 2020). This is the first budget for EU 27, after the withdrawal of the UK and the end of the transition period.

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War games will take place off Durban between South Africa, China and Russia

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South Africa’s government has finally shown its colours by inviting Russia and China for war games next month, London’s ‘Daily Mail’ writes with indignation and indignation.

SA President Cyril Ramaphosa has ditched his supposed ‘neutrality’ to the war by hosting the naval drills off the country’s east coast near Durban and Richards Bay from February 17 to 27. The move is the strongest indication yet of the strengthening relationship between South Africa, and the anti-West authoritarian regimes of China and Russia.

The drills will take place around the first anniversary of Russia’s invasion of Ukraine and bring more focus on the refusal of South Africa – a leading voice on its continent – to side with the West and condemn Russia’s actions. The South African government said last year it had adopted a neutral stance over Ukraine and called for dialogue and diplomacy.

But the upcoming naval drills have led the country’s main opposition party to accuse the government of effectively siding with Russia.

But the South African National Defence Force (SANDF), which incorporates all of its armed forces, said next month’s naval exercise would ‘strengthen the already flourishing relations between South Africa, Russia and China’. The aim of the drills was ‘sharing operational skills and knowledge’, the SANDF said.

The three countries also conducted a similar naval exercise in 2019 in Cape Town, while Russia and China held joint naval drills in the East China Sea last month.

The United States and European Union had hoped South Africa would support the international condemnation of Russia and act as a leader for other nations in Africa. But, South Africa appealed to be one of several African countries to ‘abstain’ in a United Nations vote last year condemning Russia’s special military operation.

South Africa and Russia share a long history, after the Soviet Union gave support to the ANC in its fight to bring down apartheid, the regime of repression against the country’s black majority, writes London newspaper. (And we should remember, how the British destroyed the Boers’ Transvaal and the Orange Republic of the at the beginning of the 20th century, and planted the apartheid regime here).

Apartheid ended in 1994 when the ANC won the first democratic elections in South Africa and Nelson Mandela became president.

South Africa is also a member of BRICS, a bloc of emerging economies, alongside Brazil, Russia, India and China.

South Africa’s obligations with respect to sanctions relate only to those that are specifically adopted by the United Nations. Currently, there are no UN-imposed sanctions on the particular individual, they say in Pretoria.

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Will South Korea build nuclear weapons?

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Washington’s attempt to curb North Korea’s nuclear ambitions are at a dead end. The nation is a nuclear state. Its arsenal is growing in both size and sophistication. Although Pyongyang will never be capable of staging a preemptive strike against the United States, it soon may be able to retaliate against Washington for defending South Korea, writes “Foreign Policy”.

The shifting balance has sparked a serious debate within the United States and South Korea over nuclear policy. The first question is whether it makes sense to pursue denuclearization — the famed CVID (complete, verifiable, irreversible dismantlement) — when the North already has the bomb. Although official Washington policy resolutely refuses to acknowledge North Korea as a nuclear state, reality may eventually force a policy retreat.

Even more significant, the South’s establishment wants to get its hands on, or at least close to, American nuclear weapons. Or, suggested South Korean President Yoon Suk-yeol, Seoul might develop its own. He suggested in a press conference last week that South Korea might develop its own nuclear weapon.

There has been a rolling debate in South Korea for about a year on its potential nuclearization. But that has been mostly limited to extra-governmental voices in think-tanks and academia. So it is genuinely surprising that this has already reached the presidential office.

Indeed, it speaks to just how threatening North Korea’s nuclear weapons are perceived in South Korea – and how unhelpful China has been in restraining Pyongyang – that no less than its president is now discussing this.

The South Korean fear is similar: in a spiraling crisis with North Korea, would its nuclear ICBMs compel the US to ‘slow-roll’ assistance for fear of crossing some retaliation threshold with North Korea? The answer is almost certainly ‘yes’, the author of the military portal ‘19fortyfive.com’ is convinced.

It is inconceivable now, in a nuclearized environment, that the US alliance commitment to South Korea is as automatic as it was in a conventional environment. Any US president will flinch at a course of action which might realistically incur a nuclear strike on US cities.

This new reality, since North Korea’s successful 2017 ICBM test, is only just sinking in. For a few years, it looked like former US President Donald Trump and former South President Moon Jae In might strike a deal with North Korea. That was always pretty far-fetched, but once it definitely fell apart by 2020, a South Korean nuclear debate was likely inevitable.

The debate on nuclearization in South Korea itself is culminating. South Korea public opinion is supportive. Nongovernmental opinion is tilting toward it. The country’s main conservative party has said South Korea should withdraw from the Non-Proliferation Treaty if North Korea tests another, seventh, nuclear weapon. And now the South Korean president has broached the issue too.

The big hurdle then is the Americans. The US is South Korea’s only treaty ally and its core foreign relationship. Without American defense guarantees, South Korea’s defense spending would double or triple. So South Korean governments have traditionally given American preferences wide berth.

And indeed, the American response was to play down Yoon’s comments.

In fact, the North Korean nuclear and missile threat will only worsen as the regime tests more and more, and they certainly are not going to stop. The more North Korea can threaten US cities with massive destruction, the less credible US alliance guarantees will be.

Luckily, this problem is not new. America’s European allies faced it during the Cold War because the USSR could strike the US homeland, and a variety of responses, including nuclear sharing and indigenous nuclearization, were tried with reasonable success. The US has also adapted to Israeli, Indian, and Pakistani nuclearization without a massive crisis.

So South Korean nuclearization need not lead to an alliance rupture unless the US insists on it.

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Jacinda Ardern resigned as New Zealand’s PM or was forcibly ousted from power?

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Jacinda Ardern (photo) has insisted her decision to resign as New Zealand’s Prime Minister is because she ‘doesn’t have enough in the tank’ – but there is speculation as to whether she is actually running scared of an election mauling following a public outcry over her draconian Covid lockdowns.

Ms Ardern, 42, choked back tears as she announced she will step down after just over five years in power. She insisted her decision to step down had nothing to do with the fact her Labour Party is trailing in the polls behind its conservative rivals from the National Party ahead of the upcoming election in October.

Her policies sparked nationwide protests – one protest against vaccine mandates that began on Parliament’s grounds last year lasted for more than three weeks and ended with protesters hurling rocks at police and setting fires to tents and mattresses as they were forced to leave.

As a result of the public anger over Ms Ardern’s response to Covid – which included a border closure that lasted more than two years – and her domestic policies, she was facing tough reelection prospects. This has prompted speculation that the real reason she decided to quit was because she didn’t want to face a humiliating defeat in the elections.

Ms Ardern continued: ‘I am not leaving because I believe we can’t win the election but because I believe we can and will. But we need a fresh set of shoulders for the challenges of both this year and the next three.’

Ms Ardern’s ratings have also dropped in recent months due to a worsening housing crisis, rising living costs and mortgage rates, and growing concerns about crime.

This has meant that the Labour Party, which has been in power since 2017, lost its consistent lead in the polls early last year.

Ms Ardern was elected just over five years ago on October 26, 2017, and at 37, was New Zealand’s youngest ever PM. Before that, she was the youngest sitting MP in 2008, elected aged 28.

During her resignation speech, Ms Ardern announced the next New Zealand general election will be held on October 14, 2023.

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