EU finance ministers failed to reach a compromise with the European Parliament over the 2011 budget yesterday night (11 November). If they fail to find a mutually acceptable solution by Monday, the 2010 budget will roll over to 2011, raising questions as to how the European Union will finance ambitious new projects such as the European External Action Service.
Polish MEP Sidonia J?drzejewska (European People's Party; EPP), the European Parliament's rapporteur on the EU budget, Parliament budget committee chairman Alain Lamassoure (France; EPP) and Parliament President Jerzy Buzek signalled their readiness to accept member states' demand to increase the budget by just 2.91% for 2011, spearheaded by the UK [see 'Background'].
In exchange, however, Parliament representatives asked for a stronger language on their institution's say in negotiations over the next financial perspectives, including by providing for a "contingeny fund" and supplementing the budget with EU "own resources," such as a possible new tax to help fund the Union's budget after 2013.
Last week, German Chancellor Angela Merkel strongly rejected the idea of such an EU value-added tax (VAT), a tax on air transport or a share of new financial, corporate or energy taxes. Several other EU countries see such taxes as unfair, as they would see some countries pay more than others.
Member states rejected the Parliament's proposal for guidelines on negotiating the 2013-2020 financial perspectives and diplomats blamed MEPs for what they said were unacceptable demands. In return, Parliament representatives blamed richer states, who in their words do not want to pay for policies which benefit their neighbours as well [see 'Positions'].
Melchior Whatelet, the budget minister for Belgium, the country holding the rotating EU presidency, said the procedure for seeking an agreement was still ongoing, with a final meeting scheduled for Monday 15 November.
Budget Commissioner Janusz Lewandowski warned that there would be consequences if the Union was forced to resort to the same amounts for 2011 as the previous year. He said that projects such as ITER, an international project to design and build an experimental fusion reactor in France, or the European External Action Service, expected to be launched on 1 December, may become victims of the dispute.
He also described as "catastrophic" the message that the EU would send to the world by failing to adopt a budget.