Ministers given three minutes to square the circle on EU budget

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Cyprus tabled yesterday (19 September) a ‘negotiating box’ for the European Union budget for 2014-2020, to be discussed by European affairs ministers on Monday. According to the paper, ministers are requested to limit their presentations to three minutes.

The revised, 48-page ‘negotiating box’ from Cyprus, which holds the EU's rotating presidency, develops in more detail a similar paper left behind by the Danish presidency.

In the meantime, Cyprus has conducted bilateral consultations with the remaining 26 EU members and Croatia, which is expected to join on 1 July 2013, collecting their “wish lists” for the next long-term budget, called the multi-annual financial framework (MFF) in EU jargon.

European affairs ministers already had an informal meeting in Cyprus with the key representatives of the Commission and Parliament, where they discussed a “Presidency Issues Paper”. One of its important conclusions appears to be – despite the Commission proposals (see background) – that the budget should be smaller [more].

The new negotiating box has taken further its earlier version by including a number of policy choices which, in the Cypriot presidency’s assessment, respond to the overall picture resulting from discussions held until now with member states.

The discussions, which Cyprus wants to be “sharp and focused”, will touch upon the way in which the EU budget will be spent, and not figures, which will not be tabled before the end of October. A special EU summit on 22-23 November will take the budget discussion for the first time at the highest level.

15 countries against a generalised cut

A senior EU diplomat summed up the discussions so far, saying that 15 countries had contested the Cyprus conclusion that cuts were needed across the board. But on the other side, a smaller group, “meaningful by its composition”, took the opposite view, he said.

France, Spain and Ireland have opposed cuts in the Common Agricultural Policy, while the new EU members from central and eastern Europe, plus Spain, Ireland, Belgium and Luxembourg opposed cuts in the cohesion policy.

“We should not imagine a consensus during the next 2-3 months”, the diplomat said.

A big issue also appears to be the rebates of the type that Margaret Thatcher obtained at the 1984 Fontainebleau summit. Britain, the Netherlands, Germany and Sweden also benefit from rebates to their EU budget contribution. These sums are calculated under a science of their own, and then returned to those countries.

According to the new proposal, rebates would be lump sums, the system appearing as less beneficial to these countries than previously.

A financial transaction tax (FTT) is unlikely to be introduced at the EU level because of strong opposition from Britain and Sweden. Under the mechanism for enhanced cooperation, a minimum of nine countries led by France are expected to ask the Commission to introduce the necessary legal base to fund part of their contribution to the EU budget through an FTT, a diplomat said.

Commission President José Manuel Barroso, European Parliament President Martin Schulz, European Council President Herman Van Rompuy and Demetris Cristofias, the Cypriot president, met at the European Commission for a working lunch to take stock of progress in the negotiations on the future EU budget.

The four leaders underlined the need for the budget to translate the EU's overall objectives into concrete investment for growth and jobs, said a statement from the quartet.

The statement said the next budget “should make a significant contribution to the resolution of the economic crisis”, and the four presidents agreed “to mobilise all efforts needed to reach an overall agreement supported by all institutions by the end of this year.”

Timeline: 
  • By end 2012: Negotiations on 2014-2020 budget expected to wrap up
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