Hard bargaining vs. problem-solving in EU budget negotiations : A comparative study of the character of the negotiations leading up to the regular long-term EU budget and the temporary coronavirus Recovery Fund

In the year of 2020 the member states of the European Union (EU) negotiated two major budgets: the regular Multiannual Financial Framework (MFF) for the years 2021-2027 and the covid-19 Recovery Instrument “Next Generation EU”. The first was a recurring negotiation, deciding the political and financial priorities of the EU for a mid-term period. The latter was a new proposal, an urgent response of recovery support to the covid-19 crisis. What began as diverse national responses to the crisis and an absence of any common EU measures, ended up in a historical rescue package, including the Recovery Instrument and a reinforcement of the MFF. The aim of this study is to investigate whether there are any signs of difference in negotiation approach, i.e. the use of bargaining versus problem-solving, between the two negotiations of the MFF and the Recovery Instrument. This thesis also seeks to find out if any potential dissimilarity can be explained by the factors of politicization, type of policy and crisis context. The study has been conducted by interviewing eight Swedish government officials involved in these negotiations and analyzing the stenographic protocols of the European Affairs Committee of the Swedish parliament. According to the results there were more signs of problem-solving in the Recovery Instrument negotiations than in the MFF negotiations. This is interesting as budget negotiations are known for being characterized by bargaining. Further, the Recovery Instrument differed from the MFF by being more politicized and a constituent issue, which according to prior research speaks in favor of bargaining. Despite this, the result speaks in favor of more problem-solving in the Recovery Instrument compared to the MFF. These findings demonstrate that even in budget negotiations regarding highly politicized issues of a constituent character, crisis-related factors can generate problem-solving in negotiations