EU’s heavy budget file lands on Brussels summit table

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EU heads of state and government will try to reach a final agreement with the European Parliament on the bloc's long-term budget at their summit that starts tomorrow (27 June), after several failed attempts for a compromise, EURACTIV has learned.

Martin Schulz, the European Parliament president, met with the assembly's political groups yesterday (25 June) to see whether a compromise on the EU budget was still possible.

The last round of negotiations with EU member state representatives, held on 19 June, ended up with a provisional agreement but doubts remained as to whether the centre-left would support the agreement in a vote scheduled for the Parliament's plenary session on 1-4 July.

The negotiations have focused for the past weeks less on numbers, more on giving the budget the flexibility it needs to adapt to changing economic realities – so that money can be swiftly reallocated where needed to boost growth and investment.

>> Read: EU clinches deal on multi-billion euro budget for 2014-2020

Ivailo Kalfin, a Bulgarian MEP who is the lead negotiator for the Parliament's Socialists and Democrats (S&D), said the only chance to secure backing at the July plenary was for EU heads of state and government to revisit the matter at their 27-28 June summit meeting.

Kalfin argued that the package put forward by the Irish EU presidency was not acceptable in its current form and that it would be impossible for foreign ministers to give the green light, at their meeting on 27 June.

If EU leaders produced a satisfying compromise for Parliament, Kalfin said, a final trilogue meeting could take place after the summit, ahead of the Parliament's July plenary session. The three-party talks bring together the representatives of the EU Council of Ministers, where member states sit, the Parliament and the European Commission.

If no decision is reached there, it would then be up to the Lithuanian Presidency to start new talks in the autumn, Kalfin said. In the absence of an agreement for 2014, the EU budget for 2013 would apply.

‘Half-baked deal’

The same sentiment was echoed by the other major political groups in Parliament. Guy Verhofstadt, the leader of the liberal ALDE group, said he would not accept “a half-baked deal”.

Verhofstadt insisted that a better balance between the different spending areas was needed, with a greater emphasis on future-oriented growth policies and innovation. He added it was “difficult” to disconnect this negotiation from the parallel one on the Common Agricultural Policy, as well as from the issue of payments due from the ongoing 2013 budget.

The Belgian MEP said proposals on "own resources" – the possibility for the EU raise taxes to finance itself independently from EU member state contributions – remained “an empty shell”. The MEPs insistence on a binding revision clause for the next Parliament was not being taken seriously enough by Council, he said.

“Quite simply, this is not acceptable … In our view, nothing should be agreed until everything is agreed," Verhofstadt said in a statement.

For its part, the Greens/EFA group rejected the Council's budget proposal outright, saying it had been accepted "in a personal capacity" by the Parliament's chief negotiator Alain Lamassoure (European People's Party, France). The Greens said the proposed deal is backward-looking and fails to address the EU’s future challenges.

The Greens group co-President Daniel Cohn-Bendit blamed the Council for serving “narrow national interests” to the detriment of future-oriented investments, with the Council's heaviest cuts hitting the areas of education, research, competitiveness and development aid.

EPP calls Irish statement 'manipulation'

The largest group in the European Parliament, the centre-right European peoples’ Party (EPP) didn't issue a statement yesterday, but issued the strongest reaction six days ago, over the role of the Irish presidency in the negotiations. 

German MEP Reimer Böge , who is the lead negotiator on the budget deal, stated that it had proved impossible to obtain “a truly sustainable offer” from the Irish EU presidency.

“The statement by the Irish Council presidency of an alleged agreement on the financial framework is nothing more than a manipulation,” Böge stated.

On 19 June, the Irish presidency issued a statement, announcing that its foreign minister, Eamon Gilmore, had “reached an agreement [on the EU budget for 2014-2020] with the European Parliament’s chief negotiator”,  namely Alain Lamassoure.

Böge says further that the European Parliament negotiators decided not to continue the negotiations, “if they can be called such at all”, and submit the texts agreed so far to the European Parliament.

The German conservative MEP also resigned from the post of rapporteur for the EU long-term budget.

"I do not want to stand in the way of a possible vote in the plenary of the European Parliament. I cannot, however, offer my binding support for, let alone defence of, the present texts. That is why I decided to lay down my post as rapporteur for the multi-annual financial framework, a position I held since 2004," he stated.

What has been agreed:

  • On flexibility, a total of €24 billion could be transferred for the next year, if the funds are not absorbed on time. For the first three years the amount to be transferred is capped at €3 billion, then the cap is increased by €1 billion annually, reaching €8 billion for the year 2020. The Parliament and the Council Presidency have agreed that the unspent money be redirected for growth and jobs, including for fighting youth unemployment. No agreement was reached to increase the budget of any European policy or priority area.
  • On mid-term review, by the end of 2016, the Commission will make a review of the disbursement of funds under the different programmes, and will formulate new forecasts for the Union’s needs.  The Parliament regrets the lack of commitment for increasing the budget, as well as adding new priority programmes. Also, the requirement that the changes be adopted by unanimity has remained unchanged.
  • On transparency and eurozone budget, it is agreed that the budget for the eurozone members would be an integral part of the EU budget, or in the last recourse it would be signed as its annex. It was agreed to expanding the information that will be made public, regarding taking or granting of loans on behalf of the EU, as well as for the permanent and temporary eurozone rescue mechanisms (ESM, EFSF).
  • On own resources, it has been agreed that a working group of representatives of the Commission, the Parliament and the Council be set up, which will on three occasions give recommendations to improve the system of own resources: first in the end of 2014, before the new Commission takes office, second on the occasion of the mid-term review, and third by the end of the budget period. From 2016 the national parliaments will be involved in the negotiations. The European Commission will make proposals for amending the system of own resources in the end of 2016.

EURACTIV asked today (26 June) a EU diplomat if leaders would have to deal again with the EU budget for 2014-2020 during the summit. The pronblem appears to be that the Irish Presidency claims the budget was finally agreed,while major groups in the European Parliament say was not.

The diplomat, who agreed to be quoted, but asked not to be named, admitted that the situation was indeed confusing.

“We thought [the EU budget for 2014-2020] was agreed,” he said, referring to the ‘trilogue’ meeting held on 19 June, at the end of which the Irish Presidency announced the success of the taks. The three-party talks bring together the representatives of the EU Council of Ministers, where member states sit, the Parliament and the European Commission.

“Maybe there was a little bit of problem with communication,” he admitted.

The diplomat said that according to his information, the leaders of the major political groups in the European Parliament had said that they saw “no chance” that the vote in plenary could take place during the July session.

But he said he hoped that leaders would “hopefully" not deal with the outstanding problems. Instead, he said that EU Ambassadors could take up the issue immediately after the summit in the COREPER format, and find a compromise acceptable for Parliament.

“I don’t think if would help if leaders would be dragged in a discussion about the outstanding items,” the diplomat insisted, reminding that the main parameters of the budget were already agreed at the 8 February summit

At a summit on 8 February, EU leaders reached agreement on a €960 billion long-term budget for 2014-2020, representing the first net reduction to the EU budget in history.

However, the European Parliament made it clear that it would make full use of its new budgetary powers, demanding more flexibility to spend unused funds, a mid-term review clause and more money for growth and investment.

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