Latvia, Italy join club threatening to veto the EU budget


Latvia and Italy could veto Union's seven-year budget deal that was not in their country's interest, respective leaders said yesterday (21 November). Up to now, Austria, Britain, Denmark, Romania and Sweden have threatened to sink the long-term EU budget if the agreement would harm their national interests.

Leaders of the 27-countries bloc are meeting in Brussels today to debate the budget for 2014-2020 amid a row over spending. A few countries have joined Britain and threatened to veto budget proposals.

"If our interests are completely ignored, we don't exclude that possibility [of a veto]," ?Latvian Prime Minister Valdis Dombrovskis said yesterday in an interview to the Latvian Independent Television (LNT) channel.

Though leaders "should not get carried away" in threatening the veto, he said Latvia was angry that its farmers would only get 53% of the EU average agricultural subsidy under the current proposal.

Latvia currently receives agricultural subsidies that are 35% of the EU average, but is arguing that it should receive 80% of the EU average. Farmers across the Baltics have been demanding bigger direct payments that put them closer to the EU average.

Latvia, Estonia, and Lithuania now get one the lowest levels of direct subsidy payments per hectare in the EU. 

Rome, too, said it could veto the EU budget. The Italian government would block a budget accord “if it were harmful to our citizens, if it wasn’t balanced and didn’t correspond to our criteria of solidarity and efficiency,” European Affairs Minister Enzo Moavero Milanesi said this week after a preparatory meeting in Brussels.

Other naysayers

Earlier this month, other countries threatened to veto the budget in case of reduced agricultural subsidies. 

Austria's deputy chancellor threatened that the country would veto the deal if it does not get its rebate or if subsidies for agricultural development are cut.

Chancellor Werner Faymann of the coalition partners the Social Democrats warned Austria would not be a pushover in negotiations just because of its small size.

"I have always said: ‘we will not allow ourselves to be blackmailed,'" Faymann told Die Presse. "Great Britain is no more important than Austria. No one should have a special relationship in the EU budget."

David Cameron was the first leader to flag a veto unless the EU budget is frozen in real terms and Britain's rebate is maintained (see separate article).

Polish Prime Minister Donald Tusk also said that a veto by one or more member states was a possibility, but should be used only as a last resort. Tusk said that if a veto were exercised, Poland, the biggest net recipient of EU funds, would seek to find common ground with countries that are net contributors.

"In case of plan B, a coalition with large net contributors will be important to ensure that the provisional budget is also applied to Poland," Tusk said in a speech to the parliament earlier this month.

The European Commission presented on 29 June 2011 its proposals for the EU's 2014-2020 budget – the so-called Multi-annual Financial Framework.

The Commission proposed raising the next budget to €1.025 trillion, up from the current €976 billion. This represents a 4.8% increase, which is beyond the average 2% inflation recorded in the last decade.

The European Parliament declared in a resolution on 23 October that even the original Commission proposal for freezing the budget at the 2013 level would not be sufficient to finance existing policy priorities in the "Europe 2020" strategy, which comprises the new tasks laid down in the Lisbon Treaty. 

The goal of the Cypriot presidency is to reach an agreement by the end of 2012, in line with the European Council conclusions of June 2012 [more].

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