Disagreement over financing of enlargement could lead to “budget war”

At the plenary session of the European Parliament in Brussels on 27 March, MEPs voted almost unanimously against the Council’s decision to include budgetary figures in the Accession Treaty. MEPs threatened with “war over next year’s budget” if no agreement is reached over the financing of enlargement.

MEPs declared the Council’s move “a unilateral violation” of Parliament’s budgetary prerogatives. They warned it also represents discrimination between current and future Member States because budget funds for the new members will be set in stone in contrast to funding for current members.

A trialogue between the Parliament, Council and Commission on 27 March failed to resolve the question, but another meeting is planned for 1 April in Athens. The Parliament is putting pressure on the Council to withdraw or alter Annex XV to the Accession Treaty, which includes the contested budget figures.

Parliament declared that the Council’s approach can be considered as a signal that the Interinstitutional Agreement is defunct, which means that multi-annual budgeting will be abandoned and future budget negotiations between Council and Parliament may become extremely fraught.

 

Terry Wynn(PES, UK), chairman of the Budgets Committee, said Parliament would not delay its enlargement vote on 9 April if an agreement was not reached, but there would no longer be an Interinstitutional Agreement on budgetary cooperation between Council and Parliament and war would have been declared over next year's budget.

 

The ratification of the Accession Treaty in the European Parliament, due to take place on 9 April, is the legal pre-requisite for the formal signing of the treaty in Athens on 16 April. However, the Parliament refuses to ratify the Treaty in its current form because the deal on the financing of enlargement, attached to the Treaty as Annex XV, takes away from the Parliament its power of co-decision over the EU budget by incorporating the budgetary transfers to the new Member States.

Annex XV, dealing with agriculture, structural policy, internal policies and administration, establishes maximum spending levels for the ten new Member States for each year until 2006. These figures were negotiated at the European Council in Copenhagen in December 2002.

The disputed Annex is seen by the Parliament as an infringement of its budgetary rights, as laid down in the Treaty (Article 272), and as a violation of the 1999 Interinstitutional Agreement providing for loyal cooperation and joint decision-taking by Council and Parliament in budgetary matters.

 

Parliament is due to give its assent to the Accession Treaty with ten future Member States on 9 April as a legal precondition to the signing of the Treaty at the Summit in Athens on 16 April.

 

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