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| - The host of next week's EU summit set the stage for a fierce fight over a seven-year budget plan by suggesting Friday a cap that falls short of Brussels' ambitions. European Council President Charles Michel proposes a budget capped at 1.074 percent of the bloc's GDP, estimated at 1.1 trillion over seven years, according to a document seen by AFP. It is eight billion more than the budget suggested last year by Michel, but still well below that sought by the European Commission and far short of the 1.3 percent that the European Parliament has demanded to fund EU programmes. Members states are debating their multi-annual financial framework, or MFF, for 2021-2027, the first since Britain's departure from the bloc left them with a huge shortfall. Union spending is small compared to the members' national budget, but richer mainly northern countries are resisting spending more to make up for the end of British contributions. The draft conclusions of next week's summit of the 27 EU member states, seen by AFP on Friday, says the funding of the European investment Bank should be boosted to help out. According to the draft, the contributions of Germany, Denmark, the Netherlands, Austria and Sweden -- the so-called "frugal five" -- would be reduced, but only in stages. Net contributors such as Germany, Finland, the Netherlands and Denmark want the next budget to be based on 1.0 percent of the EU's economic output, around one trillion euros. In contrast, countries that benefit greatly from agricultural and structural aid are demanding considerably more. For its part, the EU Commission has proposed 1.11 percent of economic output. Member states must unanimously approve the MFF and the European Parliament must also give its consent. Four political groups in the European Parliament had threatened to veto similar plans in a letter they sent to Michel on Thursday. The leaders of the conservatives, socialist, liberal and green groups called for more money for areas such as climate policy, research and digitisation. But they also rejected cuts in agricultural policy and structural aid for regions. mth-csg/dc/lc
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