Negotiators reached a provisional deal late Wednesday (19 June) to finalise the European Union's €960 billion long-term budget, amid doubts that the socialists will back the agreement in the European Parliament.
The deal between representatives of EU member states and the European Parliament on a seven-year spending package was announced after many hours of haggling.
"We have concluded the negotiations,” said Irish Deputy Prime Minister Eamon Gilmore, who represented EU governments in the negotiation.
“The lead negotiator for parliament and I have agreed a package that we are both going to recommend to our respective sides," he told reporters in Brussels after more than 24 hours of talks.
Gilmore said he would ask EU ministers to endorse the deal at a meeting in Luxembourg on Tuesday.
Parliament ratification uncertain
But ratification of the deal was immediately thrown into doubt by the head negotiator for the Socialist and Democrats group in parliament – the second largest political group in the EU assembly –, who said he was not satisfied with the outcome.
Ivailo Kalfin, a Bulgarian Socialist MEP, tweeted after the talks: “Negotiations concluded. Not satisfactory to all. We cannot confirm agreement tonight."
The agreement needs majority support from the Parliament to come into force as planned at the start of 2014.
Without the support of the socialist group, it is unclear whether the deal will pass a parliamentary vote scheduled for early July. Further talks among MEPs and governments may be needed to secure majority backing, EU officials said.
That could delay the start of EU development funding for poorer regions hit by recession, as well as a new initiative to combat rising youth unemployment in parts of the EU.
Spending limits unchanged, more flexibility
The deal left unchanged the overall spending limits for 2014-2020 agreed by EU leaders in February. They included the first ever real-terms decrease in long-term spending, while agriculture and regional development funding will continue to enjoy the largest budgets.
But negotiators did agree that a limited amount of unspent funds could be moved from one year's budget to the next, instead of being returned to national coffers as at present.
EU officials have said that, contrary to the spirit of the leaders' February deal, that change could mean increased spending over the next budget period compared to now, depending on the outcome of subsequent annual budget negotiations.
In a statement, the European Commission said the package includes “strong flexibility measures” so that the EU budget can be spent in its entirety instead of being returned to the member states when sums earmarked under specific headings are not fully used.
The deal also includes a binding revision clause in 2016, in parallel with a review of the EU budget’s so-called “own resources”, which refers to the EU’s ability to raise its own taxes to win additional sources of revenue.
These were two key demands of the European Parliament, which were backed by all major political groups.
Further elements of the agreement include a reinforcement of the EU Solidarity Fund to make it more responsive to natural disasters such as floods. Also, the €6 billion Youth Employment Initiative, agreed in February, would see its finances for 2014 and 2015 strengthened so that it can be mobilised more quickly.
Youth unemployment will be a key topic for discussion at a meeting of EU leaders on 27-28 June.