European Parliament walks out of EU budget negotiations

Johan Van Overtveldt, Chair of the Committee on Budgets gives a press conference on the outcome of the latest negotiating round on the Multiannual Financial Framework (MFF) and Own Resources (OR) at the European Parliament in Brussels, Belgium, 05 October 2020. [EPA-EFE/STEPHANIE LECOCQ]

European Parliament budget negotiators walked out on Thursday night (8 October) from negotiations with member states and suspended all further talks until next week, saying they “will come back to the table once there is a real will from the Council’s side to find an agreement”.

“We had no other choice but to interrupt the meeting,” members of the Parliament’s negotiating team on the Multiannual Financial Framework (MFF) and Own Resources (OR) announced.

“Progress has been made – with concessions from both sides – on new Own Resources, the role of the budgetary authority and horizontal issues, although some key political points still need to be resolved there”, the MEPs added.

The biggest issue is the top-ups to the budget, where MEPs said “no compromise is possible on this point as long as the Council rules out raising the MFF ceilings or excluding certain expenditure items like the interest for the recovery debt from their calculation”.

“We are waiting for the Council to update its negotiating mandate and finally come back with a proposal that takes into account Parliament’s key demand to improve 15 flagship EU programmes, with genuine reinforcements, for the benefit of the citizens”, the negotiating team stressed.

“We trust that the Council presidency will actively look for room for manoeuvre in the coming days”, EP’s negotiators concluded.

A spokesman for German’s Council Presidency, Sebastian Fischer, shot back on Thursday night that “not talking to each other does not bring us any closer to a solution as it always takes two to tango”.

“And a willingness to compromise is needed on all sides. Not to be forgotten: We talk about the largest EU budget in history of [the] European Union history; far beyond the original demands of the European Parliament,” Fischer added.

Talks are due to resume next Wednesday, just ahead of an EU summit in Brussels, which will now likely be dominated by the budget standoff. Delays in reaching a deal could further damage the EU’s already pandemic-battered economy, as many sectors rely on the EU funds.

The European Commission has received a mandate to come up with possible compromise proposals before then.

A day before, Germany tabled an alternative EU budget offer in an attempt to break the impasse with parliament.

In a letter to MEPs, Germany’s ambassador to the EU, Michael Clauss, had proposed to increase the budget sometime “at the end of the first half” of the next-seven year period to the tune of “upper single-digit” billions of euros and said this would “possibly be viable”. He, however, did not give specific numbers.

The proposal also included a sharper tone on the new “rule of law mechanism” that has been a bone of contention between Parliament and EU member states.

Clauss suggested to MEPs that the mechanism should rather be viewed as a way of protecting the EU budget, rather than as an offensive “financial-sanctions mechanism”.

All major parliamentary groups have been adamant that a strong rule of law mechanism must be part of the package, and have previously threatened not to give their blessing if this is not put in place.

Parliament demands rule of law mechanism before signing off on EU budget

Leaders of the four major political groups in the European Parliament warned on Wednesday (26 August) that they would not sign off on the bloc’s next long-term budget unless there was a formal deal on linking EU funds to rule of law, in the latest signal that lawmakers would not back down on conditionality.

Negotiators had previously expressed indignation at how the German presidency has handled the talks.

The July proposal, in which leaders of the 27 EU countries finally compromised on a €1,074 billion long-term budget and recovery fund instrument, took one of the longest-lasting summits in European Council history and the final deal cut funding for some of the bloc’s key priorities.

However, the Parliament has been pushing for increases in the numbers, arguing that the deal would bring about damaging cuts to some key areas, especially in 15 flagship programmes, compared with previous Commission draft proposals.

EURACTIV understands that the programmes remain the bone of contention as their reinforcement would be too small and MEPs are not keen on a reallocation of resources between them.

Talks will resume in the coming days and any eventual deal will still have to be ratified by national parliaments.

[Edited by Zoran Radosavljevic]

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