Opening the debate, European Parliament President Jerzy Buzek reiterated that the assembly was prepared to accept a modest budget increase of 2.91%, as requested by EU member states, instead of the 6.19% rise it had wanted (see 'Background').
But he made it plain that in exchange, the Parliament would seek to secure an agreement on the budget's flexibility, especially in view of the new instruments set up by the Lisbon Treaty and upcoming talks on the Multi-annual Financial Framework (MFF) and own resources.
'Flexibility' is a mechanism under which until now up to four billion euros have been allocated each year to different projects on the approval of EU member states, voting by qualified majority. The UK insists on unanimity when voting on decisions to reallocate flexible spending.
Failure to agree on reallocation under the flexibility mechanism would endanger the financing of programmes such as ITER, an international project to build an experimental fusion reactor in France, or commitments made to ACP countries.
The term 'own resources' refers to innovative ways to supplement the EU budget, for example by taxing CO2 emissions or financial transaction. A number of wealthy EU countries oppose the introduction of own resources for the EU, which they say would result in larger budgetary contributions for them.
The Multi-annual Financial Framework (MFF) refers to the next financial perspectives for 2014-2020, on which the Parliament wants some commitments to be made already while deciding on the 2011 budget.
Discussions covered three key issues: the figures for the 2011 budget; flexibility within the budget to deal with new priorities or upcoming urgencies; and the question of the Parliament's involvement in talks on the future Multi-annual Financial Framework and own resources.
European Commission President José Manuel Barroso expressed hope that the 2011 budget would be adopted before the end of this year and that the Union would have a budget from 1 January 2011.
He said the Commission would use its right of initiative to table proposals on supplementing the budget with 'own resources' before June 2011. The Commission president also called for the flexibility mechanism to be retained in order to finance projects under the 'political objectives' of the Union.
Regarding the MFF, he said it would be a test for the EU to put together a "smart budget," focusing on fields where allocating resources would bring the greatest added value.
Battle for money, battle for power?
French MEP Joseph Daul, leader of the European Parliament's largest political group, the centre-right European People's Party (EPP) group, lamented that the present budget did not take into account the EU's new competences, nor the budget review that the Parliament had asked for, and contained no funding for the 'Europe 2020' strategy.
The Council is adopting programmes but not funding them, he stated.
The leader of the Socialists & Democrats group, German MEP Martin Schulz, said the discussion was not about money, but about the direction in which the EU is developing and the rights of the Parliament as reflected in the Treaty of Lisbon, which people read in different ways.
"We are elected to deal with the EU and its budget. Now the national governments want to control and monitor us. That is the wrong way around," he exclaimed.
Alliance of Liberals and Democrats for Europe (ALDE) leader Guy Verhofstadt (Belgium) strongly supported the principle of flexibility and for own resources.
"Flexibility is not a concession from the Council. It is needed to fund new projects […] The most important thing is that we need to solve the problem of future financing of the EU. In this, own resources must be a part of the deal. This is not about changing the treaty, but about applying the treaties!"
The co-chair of the Greens/European Free Alliance group, Daniel Cohn-Bendit (France), repeated Schulz's view that the debate was not about money, saying it was instead "about the question of furthering the European idea or not".
"We want the EU to solve problems that cannot be solved nationally. But member states won't give the EU the means needed to do this. We have tabled three requests. To the member states I would like to say: Take it or leave it! We are ready to wait as long as it takes. We are not going to stop the debate in the middle," Cohn-Bendit stated.
Representing the current EU presidency, Belgian State Secretary for Budgetary Affairs Melchior Wathelet argued that the political commitments the Parliament was asking for were the real problem in the Council. "But we can have this discussion. It is in the Treaty and we will have it, maybe at a later stage," he said.
