EU diplomats: ‘It’s now or never’ to agree the EU budget

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As EU leaders meet tomorrow (7 February) for a two-day summit to ink out a deal on the Union's long-term budget for 2014-2020, diplomats said it was “now or never” for them to agree. Indeed, the political calendar of countries like Germany would make it much more difficult to reach a compromise before the 2014 European elections. 

EU diplomats said it shouldn't be too difficult for EU leaders to find an agreement, on the basis of the work done at the inconclusive 22-23 November summit.

>> Read: The EU's new budget blueprint in figures

“If we don’t have a deal now, it’s probably for the next parliament. The political calendar of the member states in the coming months will definitely not make it easier to find an agreement, neither would the political calendar of the European Parliament,” a EU source said.

In the absence of a deal, the source added that the negative consequences would be “huge” and “far-reaching”. He said the 80 or so sectoral regulations accompanying the budget which the Council approves in a co-decision procedure with the Parliament will be stalled, because it would be impossible to have a qualified majority to pass them. As a consequence, long-term policy commitments might be derailed by uncertainty, he explained.

As one diplomat put it, it was a matter of making additional cuts to the level of €30 billion, which was not seen as a big amount compared to the bloc's total budget of roughly one trillion euro for the seven-year period.

‘Clear candidates’ for cuts

The obvious “candidates for cuts” in his words were the spending headings 1a Competitiveness for growth and jobs, as well as 3 (Citizenship, freedom, security and justice”, 4 (EU as a global player) and 5 (Administration), a diplomat said.

The areas where cuts were not foreseen and would see “minor increases” could be in 1b (Cohesion) and 2 (Preservation and management of natural resources), which covers the Common agricultural policy (CAP), he added. [More on EU budget headings]

Among the other victims, the diplomat mentioned “instruments outside the EU budget,” such as the European Development Fund.

Chronicle of an agreeement foretold

Council President Herman van Rompuy is expected to give EU leaders his latest budget proposal as they meet at 3 pm (Brussels time). Reportedly, this draft was going to be a fully-fledged document, containing all the figures for the next long-term EU budget.

While EU leaders will hold their meeting with the President of the European Parliament Martin Schulz, it appears their ambassadors and experts will have less than one hour to assess the new Van Rompuy proposal and brief their head of state or government.

But a diplomat downplayed the magnitude of the effort, saying that there would be “no surprises” and that in general terms all EU countries knew what to expect. 

The summit is expected to continue over dinner from 6 pm onward. According to the Council plans, the next day should be devoted to other issues such the EU’s bilateral trade agenda, as well as a discussion to take stock of developments following the Arab spring of 2011. Finally, leaders will discuss the situation in Mali.

However, diplomats said they couldn’t foresee whether the summit would end on Friday or continue over the week-end.

Asked about one of the difficult issues surrounding the budget, namely the UK rebate, and similar refunds sought by other countries, a diplomat said he expected “some adjustments, but not major changes”.

In the latest proposal tabled by Van Rompuy in November, in addition to the UK, Germany was earmarked to receive an annual check of €2.8 billion, The Netherlands €1.15 billion and Sweden €325 million.

No sweeteners

Asked whether more countries were expected to press Van Rompuy for “sweeteners”, different sources told EURACTIV that the season of the presents was now over. France, Italy, Spain, Portugal, Hungary, Malta and Cyprus were all given such sweeteners at the last summit [read ‘Special provisions’].

Sources close to the European Council said it was important for leaders not to get bogged down in details and national issues, but rather concentrate on the main issue: the EU budget remains the only budget of growth in times of crisis, they argued.

What would parliament say?

EU diplomats also stressed the importance of leaving some “room for negotiation” with the European Parliament. Under the Lisbon Treaty, MEPs now have the opportunity to approve or reject the EU budget adopted by EU heads of state and government.

While they would decide on further cuts on the Union’s budget, EU leaders would have to take into account that afterwards, there needs to be “a political deal” with the European Parliament, a diplomat stressed.

He explained that there should be some room for maneuver left to pacify the Parliament, as MEPs would normally vote for a legal text based on the summit conclusions in a few months.

In addition, the decision on the Union's own resources-mainly custom duties on imports from outside the Union and a percentage of VAT– has to be translated into a legal text, which needs to be ratified by the national parliaments. Another 80 sectoral legislative acts must be drafted, for which the European Parliament is the co-legislator.

Therefore the vote of the Parliament should not take place anytime soon, and if Parliament decided to vote on the EU budget “next week”, that would be a political vote, not a vote under the normal procedure, the diplomat stressed.

What we are expecting from the European Parliament instead is a political message “yes but, or no unless”, a diplomat stressed.

He noted that several details could be fine-tuned and elements such as a mid-term review, flexibility between headings and years could be added to the deal. [More on the Parliament’s Position under headlines ‘Parliament may reject EU budget’ and ‘Four conditions’.]

“We really count of the responsibility of institutions,” he said, referring to the European Parliament.

The European Commission proposed a draft budget for 2014-2020 which represents a freeze in spending in spite of the Union having gained new competences under the Lisbon Treaty.

The Cypriot presidency tabled a proposal, flatly rejected by the Commission and the Parliament. Then followed another proposal by Council President Herman Van Rompuy.

The 22-23 November 2012 summit ended without an agreement, as some leaders reportedly tried to slash further Van Rompuy’s latest budget proposal (of €973 billion) by an additional €30 billion.

EU leaders are expected to have another summit on 7-8 February with the objective of agreeing the 2014-2020 EU budget.

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