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Positions still ‘quite far apart’ at EU budget summit

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Published 23 November 2012

French President François Hollande said it looked unlikely that European Union negotiators would reach an agreement today (23 November) on the bloc's nearly €1 trillion budget for 2014-2020. German Chancellor Angela Merkel expressed hope that a deal could be reached at another summit early next year.

Meeting for their 25th summit in three years, EU leaders left the table at 2 a.m. and agreed to resume talks today noon, but little hope subsists that they can find common ground before another summit in early 2013.

“I believe that the positions are quite far apart, in certain respects,” Merkel told journalists, adding: “I believe that we will move forward a little tomorrow but I have my doubts that we will achieve a result … There is a high likelihood of a second stage.”

“Everyone agrees this is going to take time," Hollande told journalists. Asked whether EU leaders could fail to resolve their differences on Friday he said: “That's the most likely outcome.”

The summit started yesterday at 11 p.m. after a long session of “confessionals” – bilateral  meetings with Council President Herman Van Rompuy and Commission President José Manuel Barroso.

Following these meetings, Van Rompuy made changes to his proposal for the Union’s budget for 2014-2020. While keeping the overall budget figure roughly at the same level of €973 billion, he proposed an additional €8 billion for agriculture and €10 billion for cohesion.

On the other side, the new proposal is slashing €13 billion from the “Competitiveness for growth and jobs” budget category, which includes the Connecting Europe facility; €1.6 billion for justice and security; and €5 billion for external policies. In the initial proposal, this category was €152.6 billion.

“The proposal I put on the table is a moderation budget. The times call for it. Doing more with less money involves political choices. This is painful, even when cuts are evenly spread,” Van Rompuy told leaders.

Franco-British clash

Although hardly any country is happy with the latest Van Rompuy proposal, the main controversy appears to be between the United Kingdom, whose Prime Minister David Cameron wants deeper cuts, and France, which fights to preserve payments to its farmers at the level proposed by the Commission, which is €17 billion higher than the revised proposal.

France is also concerned that the cuts in the administration budget which Cameron is requesting would imply abandoning Strasbourg as one of the two seats of the European Parliament.

Hollande hit at the British rebate, won by then Prime Minister Margaret Thatcher in 1984, and introduced due to the fact that the Common Agricultural Policy benefits France more than Britain. The British rebate would remain under the Van Rompuy proposal.

“I cannot accept that the richest countries of the European Union come to request cheques, rebates and discounts and France, in addition, has to contribute to that. Everyone should make an effort,” Hollande told journalists Thursday night.

Everyone unhappy?

But other countries too frown at the Van Rompuy proposals. Estonia, Latvia and Lithuania, which were formerly part of the Soviet Union and need to build energy connections with the EU, will without doubt be affected by cuts to the Connecting Europe Facility.

Austria and Denmark, which have also asked for a rebate, are unhappy with the proposals. The Van Rompuy paper foresees annual “corrections” in favour of Germany (€2.8 billion), The Netherlands (€1.15 billion) and Sweden (€325 million).

Italy, a country that contributes more to the EU budget than it gets in return, is unhappy with the current proposals. Before the summit, an Italian minister threatened a veto, and in Brussels Prime Minister Mario Monti said that his country would not “accept the unacceptable”.

Poland and the other poorer East European countries fear further cuts in the budget in the course of the negotiations.

Also, Poland rejects the capping on spending on cohesion funding at 2.35% as proposed by Van Rompuy yesterday. Poland insists a return to the former figure of 2.4%, as the difference amounts to less revenue for the country of €1.5 billion.

Positions: 

European Parliament President Martin Schulz told EU leaders that the institution he represents is categorically opposed to the freezing of the EU budget, or multi-annual financial framework, let alone to cuts in that budget.

“You should understand that freezing or cutting the EU budget means abandoning the Europe 2020 Strategy,” he warned.

“We are looking to you to negotiate a sensible compromise today. If you fail to do so, the European Parliament will not give its approval to the MFF, because some Member States are trying to use the MFF negotiations to alter very nature of the EU. The European Parliament is categorically opposed to any such change.”

EurActiv.com

COMMENTS

  • How does France justify the hundreds of millions it takes to keep the Strasbourg venue for the EP?

    Do none of the other 26 see this as profligate lunacy? Reckless spending? Nationalistic vanity?

    How the hell do they get away with it? And ask for budget increases at the same time? A lot of cowardly politicians out there.

    By :
    Charles_M
    - Posted on :
    23/11/2012
  • It is not possible to negotiate with people that are completely unwilling to compromise. It never has been and it never will be.

    Will the rest of the EU kowtow to UK pressure and cut back the proposed EU spending for the next seven years, when it is not abundantly clear that the UK will itself remain inside the EU for that long?

    It is hardly a credible stance. Once again, at a time when Europe could do with strong leadership from the UK, what we actually get instead is snide, arrogant, bossy, short sighted and short-term.

    If everyone thinks you might leave before the desert arrives, what gives you the right to insist that everyone eats your choice of pudding?

    By :
    Rob Jones
    - Posted on :
    23/11/2012
  • Yummy - Strasbourg pudding all round..

    By :
    Charles_M
    - Posted on :
    23/11/2012
  • France will do anything to protect farmers, as always no guts ,we should pay less not more,asking countries who ,get more out than they put inks like asking turkey to vote for Xmas ,time to pull the drawbridge before the Bulgarias and romanings arrive to rip us off,god help us if milliband ever was elected,turn the lights off when you leave.......

    By :
    T gibbon
    - Posted on :
    23/11/2012
  • T gibbon

    I have always understood that France needs the CAP subsidy to maintain small French farms that have been subdivided by inheritance law to unsustainable sizes .
    It has been said that the subsidy in fact goes to French farming interests in North Africa . I have stayed with friends in Southwest France , who have told me the much of the land which is in small ownership units is not productively farmed at all .

    By :
    David Barneby
    - Posted on :
    24/11/2012
  • Hi dave,get your point ,what I don't get is (we don't support Europe) as suggested by some euro ministers, try telling that to the thousands of English lying in there graves to save these same euro freeloaders,while the human rights lobby continues to undermine our security there will always be a support for the out lobby,Europe would be better served by addressing these concerned and gain the support of u k...

    By :
    T gibbon
    - Posted on :
    24/11/2012
  • David Barnaby, 80% of french agriculture is owned by a handful of agro-industrialists whose intensive exploitation in absolutly massive pieces of land employs more engineers and tradesman than farmers. The CAP has always been supporting this dozen poductivist companies sharing basically 65% of french territory (almost twice the UK). Most Brussels money goes to them, which they invest more in machines and chemicals than people, and in so doing impose ridiculous prices on the thousands of small farmers still left who only share less than 20% of french agriculture. As the CAP works with quotas small farmers are less and less able to compete with the mega farms, and often have to concentrate on only one product, but they are miserable and bought out more and more. You only need to drive across France to realise the vastness of most exploitations and their use of advanced technology. The problem is that it's not the other EU citizens who endure all the health, environmental, and lanscape damages that this mecanised and intensive agriculture causes to the french countryside and its inhabitants.

    Other EU countries should on the contrary put more pressure on France not to encourage this mad productivist agriculture that's only meant to fullfill quotas to sustain a certain price on the world stock markets and who's produce often ends up destroyed anyway, just so that Africa remains incapable of competing with France and starves some more!

    By :
    UK-skeptic
    - Posted on :
    24/11/2012
  • T gibbon
    The British people never have and never will support the EU , despite the endeavours of successive British governments . Britain needs to leave and let the mainland members do it how they like . I believe politicians are wrong to suppose that trading and business relationships will be blocked or come to an end , we buy more than we sell .

    UK-skeptic
    That is just the answer I was seeking !!! I was aware that France does not spend the CAP money to support impoverished French farmers , that it was farming on a massive commercial scale .
    Of course we all know that the EU is France and Germany's baby ; but France always abuses her rights at any opportunity .
    I begin to see that the EU has grown into an unsustainable membership , with too many countries out with the begging bowl and not enough countries now able to offer charity .
    CAP to France should be stopped , at risk of her leaving the EU , but I doubt that she would .

    By :
    David Barneby
    - Posted on :
    24/11/2012
  • David Barneby, You say "Britain needs to leave and let the mainland members do it how they like . I believe politicians are wrong to suppose that trading and business relationships will be blocked or come to an end , we buy more than we sell."

    You are being far too theoretical. If anything, Britain's economic dependency on the continent has increased, since it was decided 50 years ago that the country must abandon EFTA and join the EU through economic necessity. If you look at it on a country to country basis, the EU represents 50% of Britain's trade. But the UK accounts for only 5% of trade for each of the other EU-countries who will be deciding EU economic policy after Britain has left.

    And your approach is blasé. British trade would suffer if it left the EU, who could seriously claim otherwise? Apparently you are not involved in any risk taking international "business relationships" yourself. Otherwise you would be wondering who will be left to trade with if the London political and media bubble suddenly decides to make a "law" cutting your company off from the world's most important markets right on your doorstep, because they prefer the idea of you trading with unnamed markets far away who must abolish their trade barriers without demanding any regulations if they want to do business. Besides being willing to integrate their economy with Britain's, these alternative partners must be cheaper to access, represent over 20% of world trade, with democratic institutions, a highly skilled workforce and quality infrastructure, but not dare ask for any rules to manage the relationship. So far I can't see that happening.

    Because such a place doesn't exist on this planet.

    So if your cunning plan doesn't work out, and the UK outside the EU still needs to enjoy the same access to the single market as before, it will unfortunately have to contribute to the EU budget and sign up again to all those EU regulations, (like Norway and Switzerland do) continuing to apply European standards on bananas and other such bains of the london media intellectuals.

    Becoming an EU satelite with no access to decisions, instead of an EU member, Out with opt-ins, rather than In with opt-outs. What progress!

    By :
    UK-skeptic
    - Posted on :
    24/11/2012
  • "I believe politicians are wrong to suppose that trading and business relationships will be blocked or come to an end , we buy more than we sell ."

    Oh goodie...an economic argument from UKIP. The less the UK sells, the more influencial it shall become! How wonderfully decadent!

    Lets stop exporting then, we need to focus on buying. Foreigners will be falling over themselves to accept our never-to-be-debited credit-card. It will be much less stressful. The only thing to worry about is our shopping list really, why on earth didn't we think of this before? ....

    The UK should put it to a referendum, and Westminister can declare a new opt-out from the WTO, making an exception for Britain, thanks to which the rest of the world must henceforth "sell" everything to us and pray to be chosen by London, while in return the British keep themselves busy leafing through catalogues and comparing delivery times.

    By :
    Rob D.
    - Posted on :
    25/11/2012
  • UK-skeptic
    " you are being far too theoretical ".
    Of course one cannot know precisely how Britain's trading and relationships with the EU would be , if Britain left . However if you are going to quote figures , you need to look them up and give acurate ones ; even if throwing them off the top of your head fits your sarcstic reply.
    As a general rule Britain trades 40% with the EU and 60% with the rest of the world . That must of course be subject of variation from year to year . For the most part over the years Britain has purchased more from EU countries than she sells . Is it possible that EU countries would refuse to trade , sell to Britain after her separation , or be forbidden by the EU ? I don't think so , neither do I think tariffs would be imposed , because Britain would receive not pay them .
    I am sorry if you are an EU enthusiast and things are not going the way you would like to see for EU success , why don't you try to make an informed and constructive reply .

    You have to understand that the British people were lied to , that Ted Heath and the British government took the British people into the EEC under false pretenses , we were lied to again in 1975 when there was a referendun on remaining in or leaving the EEC .
    However much successive British government have tried to sell the EU to the British people , it is a NO GO , the people don't want to know . Britain's government is in a position where it tries to support the EU , but with a very negative population behind them .
    British people's attitude has nothing to do with European relations , where we have many friends .
    The Maastricht treaty placed EEC member governments in a blackmail situation , that if they didn't sign , that was the end of the EU for ALL member states .
    John Major signed Maastricht in the full knowledge that he could scarcely get support from his government and threatened a general election if the didn't support him . He knew too that the people were against his signing Maastricht . Britain should never have gone beyond the EEC free traiding area .
    The EU as now is a political entity , ever closer union , a single federal state , governed from Brussels , a single currency , till the EU is one enormous conglomerate , EUSSR .
    Whatever the benefits or losses , British People want out .

    By :
    David Barneby
    - Posted on :
    26/11/2012
  • Rob D
    Why don't you read up on the EU and write an informed comment .
    Your reference to the UKIP , the EU hates Nigel Farage because he comes out with the naked truth about the EU.

    Indeed The British government should hold an IN/OUT referendum in Britain and act upon the result . I suspect a surprising number would vote to leave the EU .
    Britain is already a member of the UN and WTO in her own right , so nothing changes , business as usual .

    By :
    David Barneby
    - Posted on :
    26/11/2012
  • Accurate figures? HM Revenus and customs statistics for 2011 and 2012 place the UKs importations and exportations with the EU before its trade with the rest of the world
    £17 billions imports / £14 billions exports per year from and to the EU
    £16 billions imports / £13 billions exports for the whole rest of the world. See these 2 graphs

    trade with the EU: https://www.uktradeinfo.com/statistics/euoverseastrade/Pages/EuOTS.aspx
    trade with non-EU: https://www.uktradeinfo.com/Statistics/NonEUOverseasTrade/Pages/NonEuOTS.aspx

    But were it to be 40%, I anyway wonder how you can consider it as a negligeble amount.

    According to this 2011 graph from the guardian, the UK exports more to Benelux than it does to the USA. If you add on only Germany, it's more than to the Usa, China, Russia, Japan, India, Canada, Australia all together. Guess how much for the Eurozone and the EU.

    http://www.guardian.co.uk/news/datablog/2010/feb/24/uk-trade-exports-imports#zoomed-picture

    When you say you would be in favour of remaining in the free trade area (and "not beyond") does that include already contributing to its budget and obeying its rules, institutional regulations and standards or not even that? I'm afraid no one will take you seriously.

    It's not a question of whether the UK is "refused" or if the EU fancies continuing trading with the UK or not. It's a question of rules in the Single Market (or in any community system really, free or not). Either the UK contributes to the EU budget, observes common EU legislation and adheres to the decisions of the European court of justice. Or it won't be able to access the single market anymore under the same conditions. Why would the other countries, making sacrifices under these conditions allow the UK not to accept the constraints, yet still enjoy the same advantages as them? If it were possible several countries would already have done it. Your analysis is just wishful thinking.

    Do you realise that you are still contesting a referendum held 40 years ago because you consider 67% of the british people were lied to when they clearly voted YES to a simple question: "Do you think the UK should stay in the European Community (Common Market)? Put a cross (X) in the appropriate box". I mean you can always say one or other politician in a political campaign has been lying, but this is a pretty clear answer from the british people.

    Why not hold another referendum, we'll see what the opinion polls look like when people hear the other side of the argument during a campaign, and how your strategy of leaving the EU will convince people with mortgages and bank accounts, under pressure from business leaders, Washington, the CBI / city lobbyists, Universities, media, all governing political parties, trade unions, not to mention environmentals, actors, pop stars, and the whole metropolitan multi-cultural cosmopolitan mainstream of BBC phonies.

    By :
    UK-skeptic
    - Posted on :
    27/11/2012
Background: 

The European Commission presented on 29 June 2011 its proposals for the EU's 2014-2020 budget – the so-called Multi-annual Financial Framework.

The Commission proposed raising the next budget to €1.025 trillion, up from the current €976 billion. This represents a 4.8% increase, which is beyond the average 2% inflation recorded in the last decade.

The European Parliament declared in a resolution on 23 October that even the original Commission proposal for freezing the budget at the 2013 level would not be sufficient to finance existing policy priorities in the "Europe 2020" strategy, which comprises the new tasks laid down in the Lisbon Treaty. 

The goal of the Cypriot presidency is to reach an agreement by the end of 2012, in line with the European Council conclusions of June 2012 [more].

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