The European Parliament budget committee has given its thumbs up to a compromise agreement reached with member countries on the EU’s budgets for 2012 and 2013.
MEPs voted through a €9 billion increase in the 2012 budget to cover a shortfall in funds, which will be given in two tranches: the first of €6 billion by the end of the year and the remaining €3 billion early in 2013.
The agreement is an important political signal, said centre-right MEP Giovanni La Via , one of the Parliament’s leading negotiators on the budget, adding it ensures the EU to properly fund and implement its policies.
Last month European Parliament negotiators boycotted talks with EU governments to finalise the €137 billion budget for next year, after member states refused to first approve a last-minute request for more funds in 2012.
Many northern European countries that contribute most to the bloc's budget have been angered by demands for above-inflation increases in future EU spending, which they say fly in the face of budget cuts and austerity policies being implemented at home.
EU budget committee chair Alain Lamassoure declared the result as a victory over British Prime Minister David Cameron.
The flagrant move means that the 2.02% rise agreed by prime ministers across Europe in December 2011 and hailed as a victory by Cameron has been torn up, commented conservative UK MEPs.
"This move makes a mockery of the entire budget negotiation. What is the point of EU summits on the budget if the EU institutions can supersede all the agreements made by the Council of Ministers by back door top-ups at the end of the year?” said EU Commission Chief Accountant and UKIP MEP Marta Andreasen.
"The EU budget process has now descended into farce. Unfortunately taxpayer's won't be laughing as they pick up the bill for this fiasco,” she added.
Greens also regret the deal, which they say fail to bridge the shortfalls under the 2012 budget and continue the under-budgeting for 2013.
“This is a bad deal for Europe. With EU governments only agreeing to meet part of the shortfalls for 2012, the 2013 budget will have to fill the resulting €3 billion gap in payments to programmes in EU member states that have already been committed to, “ said MEP Helga Trüpel, the Greens budgetary spokesperson.
“That will lead to inevitable shortfalls next year, perpetuating the current cycle,” she said.
The agreement will now be voted by both the European Parliament and the Council next week.
President of the European Parliament Martin Schulz said in a statement:
"The drafts for joint statements regarding payments, agreed by the three institutions in trialogue, must be strengthened by the signatures of the Presidents of the three institutions. Bills for the budget year 2012 cannot be financed through shifting within the already underfinanced budget 2013, but must be provided by the member states additionally. The necessary guarantees for this must be delivered at the highest levels of the institutions; there is no margin left for interpretation.
As agreed among the political groups in Parliament, this is a precondition for a final positive vote in the European Parliament. I therefore invite President Christofias and President Barroso to sign the agreed declarations together with me ahead of the meeting and vote of the Budget committee on Monday."
In the EU budget for 2012, coffers ran empty for programmes that include priority areas such as education, youth and research.
The Commission said it was not surprised by these developments.
When the EU budget for 2012 was adopted in November 2011, Budget Commissioner Janusz Lewandowski pointed out that the Parliament and the Council had agreed on a budget much lower than the one proposed by the Commission.
In April, the Commission defended plans to increase the bloc's spending for 2012 by 4.9%, arguing that the proposal struck a balance between austerity and the need to boost growth. The proposed 2012 budget was of €132.7 billion, but the one that was eventually adopted was €129.1 billion.
A revised 2013 budget plan must now be agreed by the end of this year to avoid triggering an arrangement where the total for 2012 is rolled over and paid out in 12 monthly instalments, which would cause chaos in several areas of EU spending.