August 16, 2022

Leaders in Europe Agree to Deal on Long-Term Budget

The expected deal met the demands of northern European countries such as Britain and the Netherlands that wanted belt-tightening, while maintaining spending on farm subsidies and infrastructure to satisfy the likes of France and Poland.

It is the first net reduction to the EU’s long-term budget in the bloc’s history, representing a decrease of around 3 percent on the last budget and shaving spending in areas such as infrastructure, bureaucracy and scientific research.

Last-minute haggling over precisely how to divide up the 960 billion euros (822.4 billion pounds) to be spent between 2014 and 2020 dragged out the process, before Herman Van Rompuy, the president of the European Council and chairman of the summit, announced that a definitive deal had been struck among the leaders.

“Deal done!” he said in a message posted on Twitter.

At a news conference shortly afterwards, battling to stay alert after nearly 36 hours awake, Van Rompuy said the agreement was a budget of moderation that reflected straightened times.

“We simply could not ignore the extremely difficult economic realities across Europe, so it had to be a leaner budget,” he said. “For the first time ever, there is a real cut compared to the last multiannual financial framework.”

The deal must now be approved by the European Parliament, where leading legislators have already expressed opposition. Securing parliamentary approval is likely to take several months and is far from guaranteed.

After negotiating through the night, leaders broke for a brief rest, allowing German Chancellor Angela Merkel to swap her green jacket for a lilac one, and returned to address a list of questions, including how to satisfy smaller countries such as Romania and Bulgaria among the 28 states covered by the budget.

Mindful of their restive voters, Northern European countries were adamant that as they shrink spending at home and grapple with the aftermath of the global financial crisis, the European Union had to do the same by cutting headline spending.

Around 12 billion euros was cut from the last budget proposal, made at a summit in November, bringing the total reduction from the European Commission’s original blueprint to 85 billion euros. European Commission President Jose Manuel Barroso said he was disappointed, but understood the logic.

While vast as a headline figure, in annual terms the budget amounts to just 1 percent of total EU economic output.

The cuts agreed fell mainly on spending for cross-border transport, energy and telecoms projects, which were reduced by more than 11 billion euros. Pay and perks for EU officials – a top target for Britain – were lowered by around 1 billion euros.

Spending on agriculture was spared further cuts, and there was an increase of about 1.5 billion euros on rural development over the seven years, satisfying France, Italy and Spain.


Even with a deal, around 40 percent of the spending will still be dedicated to farming, something that frustrates many northern European states, which want a more dynamic budget.

At the same time, officials said money had been set aside for measures to stimulate economic growth, for research and for structural funds to flow to countries worst hit by the economic crisis, including Greece, Ireland, Portugal and Spain.

There were also stipulations for green investment and 6 billion euros for a fund to combat youth unemployment via apprenticeships in hard-hit countries.

The deal still faces further hurdles, not least at the bloc’s parliament. “The European Parliament will not accept this deficit budget if it is adopted in this way. That is certain,” the parliament’s president Martin Schulz said.

Van Rompuy urged the parliament to be responsible and to reflect carefully before deciding to reject the spending plan.

In recent weeks, Van Rompuy has been in touch with every EU leader to assess where the contours of an agreement may lie.

But reaching a deal was never going to be a simple since it also involves delicate negotiations over rebates – amounts countries get reimbursed after they have made contributions.

Denmark won a refund of around 130 million euros a year, but other rebates were trimmed or modified. The Czech Republic was among a small group of countries that fought for final extra distributions, mostly for funds to build infrastructure.

The EU calculates two budget numbers: a headline ‘commitments’ figure that sets a ceiling on how much can be paid out, and a lower ‘payments’ figure that indicates what will actually be spent.

The baseline payments figure in the framework agreed on Friday was 908 billion euros, a figure low enough to convince Britain, which focuses on payments rather than commitments, that it was getting a satisfactory deal.

(Additional reporting by John O’Donnell, Illona Wissenbach, Andreas Rinke, Robin Emmott, Luke Baker, Mark John, Peter Griffiths and Emmanuel Jarry; writing by Luke Baker and Robin Emmott; Editing by Toby Chopra, Will Waterman and Giles Elgood)

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Corner Office: Lars Bjork: Order Is Great. It’s Bureaucracy That’s Stifling

 This interview with
Lars Bjork
, C.E.O. of QlikTech, a data software company, was conducted and condensed by
Adam Bryant

Q. Do you remember the first time you were somebody’s boss or manager?

A. It was in 1984.  I had the opportunity to work in construction in New York, coming right out of undergrad.  I was sick and tired of school at the time. I didn’t want to study anymore.  My uncle had built one of the largest construction companies in the world, so he got me a job on the Throgs Neck Bridge in New York as an assistant supervisor on site. 

I was 22, and the men were double my age and tough.  And I think the only way I could go about it was just walk up and try to speak to them and try to earn their respect, which I did.  It took some time.  It was rough at the beginning, but I learned a lot from that.  It was hard, tough, but a very fair environment.

Q. How did you handle it?

A. They looked at me skeptically.  Who is this kid just out of school?  He doesn’t know anything about what you really do on a construction site like this.  But I was a foreigner, and they were curious, so they said, let’s hear him out, see who he is. 

Then it just comes down to proving yourself — things you give them advice on or things that you tell them that are solid and sound, and weren’t just pulled out of the air.  I’ve always been very open toward people.  I never kept anything to myself, and I just explained to people what was on the agenda for the day, and why we were doing this.

Q. What has been your approach to leadership?

A. I have never seen myself as a leader, someone who says I’m going to become a C.E.O.  I never did that.  And that goes even for where I am now.  I didn’t start as C.E.O. at this company. It was never something that I put on a map, where I said, I’m going to get there.  It’s more the result of me very much earning the respect of the people I work for, and they said, this is a guy we’re going to promote.  Q. What else?

A. I’ve always been competitive, and I’m also curious.  I want to learn things, and that’s why, early in life, I put myself in challenging situations, like coming to the United States from Sweden to work here. I’m also more humble today than I was 20 years ago.  I am by no means the expert.  I’m not the smart guy in the room.  I might have an ability to bring people together and get the best team or have a sense of what’s needed. Being the coach — that’s sort of what it’s been for me.

Q. What were some other big lessons?

A. I once worked for somebody who managed in such a terrible way that I decided to never work with people who treat people badly.  Life is too short for that.  Let’s work with people who appreciate you and you appreciate them. It was such a terrible experience, so I left the company because I didn’t want to be associated with that. 

For me, it’s super-important — if I love my job, why wouldn’t I want the same thing for my co-workers? They will feel good and they will enjoy working and they will stay, and I know it will show up in the results as well.  There is no other way to do it.  Motivated people will go way further than anyone else. 

Q. Tell me about the culture at your company.

A. We developed five core values that we live by.  The first one is “challenge,” because we are a disruptive software company. Always challenge the conventional, because if you follow others, you can at best be No. 2.  And if you want to win, you’ve got to find your own way to the top. And we challenge each other at QlikTech, because if you’re complacent, you’re not going to survive. 

The second one is move fast — because we are building a hypergrowth company. It’s O.K. to make mistakes, just don’t make the same mistakes.  Learn from them. The third one is, be open and straightforward.  What that means is just be open if you think something is wrong.  We hear everyone out.  It’s important that everything is on the table, because somebody might have something brilliant to say.  But when we leave the room and we’ve decided on one thing and your view might not be incorporated in that, you still have to respect the decision.   

The fourth one is teamwork for results.  This is not about the individual.  This is about the team, the power of the team.  In our company today, we have 28 offices in 23 countries, so our team is a virtual one. You reach out and you speak to people everywhere, and you learn a lot from people that way, because there are a lot more similarities between cultures than you might think. 

The fifth one is take responsibility. You’re given authority to be part of a lot more than just your position, but some responsibility also comes with it.  And if you want to grow fast, you have to put into people’s DNA the idea of being cost-conscious. That’s why we all still travel coach.

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