Van Rompuy to receive EU leaders for budget ‘confessions’

The 22-23 November EU summit to debate the 2014-2020 budget will be preceded by  “confessionals” one day earlier, with the 27 heads of state informing European Council President Herman Van Rompuy privately of their 'red lines' on spending, EURACTIV can reveal.

“Confessionals” have already been used in the past to pave the way for an agreement on the EU's long-term budget.

However, for the first time since the Lisbon Treaty entered into force, the role of the “priest” will be played by European Council President Herman Van Rompuy instead of the rotating EU presidency, now held by Cyprus.

The last such “confessional” was held in December 2005 under  the UK Presidency, with the then-British foreign Minister Jack Straw gathering testimonials.

But instead of playing honest broker, Britain now appears to be acting as the chief troublemaker, with Prime Minister David Cameron threatening to veto the EU's long-term budget unless he gets a real-term freeze. France and Denmark have also threatened to place vetoes, on agriculture spending and overall budget levels respectively.

Money talks

Van Rompuy’s services will hold a first round of discussions with member states this week. The next step will be a meeting of EU ambassadors on 15 November and a gathering of European Affairs ministers on 20 November.

The highlight of the week will be Angela Merkel's visit to Brussels on 7 November. The German Chancellor will address the European Parliament and then travel to London on the same day to meet with UK Prime Minister David Cameron.

As usual, Germany will play a crucial role in brokering a deal, said a diplomat from an East European member state.

The diplomat, who was speaking to the press on condition of anonymity, described the EU budget debate as being dominated by the seven or eight net contributor countries, with the Cypriot EU Presidency following their positions blindly.

“Now there’s a new institutional set up," he said in reference to the Lisbon Treaty, "but it doesn’t change the situation".

"Van Rompuy doesn’t have money in his hands,” the diplomat added, alluding to Germany's contribution to the EU budget, which is the largest of all member countries.

Cypriot Presidency cuts €80 billion

The budget talks will be based on a European Commission proposal, presented in June last year, which suggested raising the next seven-year budget to €1.025 trillion, up from the current €976 billion.

The increase was justified by the EU's planned enlargement to include Croatia and other Western Balkan countries, and new missions such as foreign policy and external relations, conferrred on the EU Executive under the Lisbon Treaty.

Faced with a veto threat from Britain, which called for a de facto budget freeze, the Cypriot Presidency proposed to reduce the Commission's proposed budget by €50 billion across all categories.

But according to the Eastern diplomat, this “does not cover the real truth”. The real figure, he explained, should take into account the financing of space-related projects – Galileo, ITER, GMES – as well as the Emergency Aid Reserve and crisis reserve for the agricultural sector, which were planned outside the long-term budget but included in Nicosia's “negotiating box”.

With those five programmes, the actual cuts amount to €70 billion, and when Croatia's planned July 2013 accession is considered, the real cuts advanced by Cyprus amount to €80 billion, compared to the Commission proposal (see background).

Although they are in different economic situations, Eastern European countries generally oppose massive cuts to the EU budget, such as those proposed by the UK (to the level of €200 billion) or Germany (€130 billion).

Their main argument is that EU leaders cannot send a signal to European citizens that EU cohesion funds, which redistribute wealth to poorer regions, are “bad policies”. Cohesion policies are not charity, they argue, because with each euro spent on cohesion, some 61 cents go back to net contributor countries.

Another argument used by the "friends of cohesion" group is that calls to cut the EU budget are a reflection of the current economic crisis, which should not last forever.

“Should we extrapolate the crisis up to 2020?” the diplomat asked.

What to expect?

The Eastern diplomat said he expected the budget figure to decrease further in the coming weeks, with the definitive cut being probably a “three digit” decrease – €100 billion less than the Commission proposal.

Even the UK could show some flexibility, the diplomat said. During discussions in the British Parliament it was said that Bulgaria, Romania and Poland should be given “more money” from the EU budget, so that their nationals are encouraged to stay at home instead of seeking employment on the British isles.

Journalists asked the diplomat whether it was not in the interest of eastern European countries to veto the EU's long-term budget, as this would mean carrying over the 2013 sums into the following years. But the official was negative, saying that an unsatisfactory deal was better than no deal at all.

With yearly budgets to the level of 2013 spending, the Union would “have the money, but not the programmes to spend it,” the source added.

An agreement at the November summit is seen as key for sending out a positive message to the outside world and to the European citizens.

“How would you expect in December that leaders would design a decades-long vision for Europe, if they are not enable to solve this?” the diplomat queried.

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 had said in a resolution on 23 October, adopted by an overwhelming majority, that even the original Commission proposal for a freezing of the budget at the level of 2013 ceilings 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, let alone any unforeseen events. 

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].

  • 22-23 Nov.: Extraordinary summit to discuss long term budget for 2014-2020, preceded by “confessional” on 21 Nov.
  • 13-14 Dec. 2012: Final report and roadmap for further economic and monetary union to be adopted by EU leaders at Brussels summit
  • 13-14 Dec. 2012: German Chancellor Angela Merkel hopes the summit can agree a concrete date for the start of a convention on a new EU treaty to complete the EMU by this date.

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