Institutional Affairs

  • EU budget negotiations are always difficult - perhaps even more so this time round (Photo: aranjuez1404)

EU parliament reminds governments of new budget powers

26.09.11 @ 09:24

  1. By Honor Mahony
  2. Honor email
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As member-state wrangling over the next multi-annual budget gets underway, parliament is keen to remind governments that the time-honoured tradition of sleepy-eyed leaders announcing a deal within spitting distance of the deadline will no longer be possible.

Under the Lisbon Treaty rules, in place since late 2009, the parliament has for the first time the right to approve the seven-year budget, with the next phase running from 2014 to 2020.

"This time it will look a little different to previous negotiations. We all remember - at least the older ones of us do - that we always had a 'night of the long knives at the end'," said German socialist MEP Jutta Haug at budget a discussion last week with Janusz Lewandowski, the EU commissioner in charge of the purse-strings.

"At some stage, the EU heads of state and government, completely exhausted at around two or four or whenever in the morning, came crawling before the cameras and said 'Eureka, we've done it!'. That is not going to work like that any more because now parliament has a say too."

"The night of the long knives won't happen this time. If the heads of state and government reach an agreement, that is all well and good. But they need the agreement of the European Parliament," said the deputy.

Haug is a member of the Sure committee, a special group set up by the parliament to look into how the next budget should be spent.

These MEPs issued a report before the summer, subsequently passed by the entire parliament, calling for a five percent increase in the EU budget from 2014, which they said would amount to about 1.11 percent of the EU's gross national income.

At the end of June, the European Commission put forward a formal budget proposal suggesting it be raised by 5 percent to €1,025 billion. This corresponds to 1.05 percent of gross national income.

A further €58.3 billion of EU spending - for such things as the bloc's development fund and ITER, its fusion reactor project - is not formally a part of the budget.

The formal budget and the informal budget would amount to 1.1 percent of GNI, the same as the parliament's position.

Lewandowski said the commission had done this deliberately: "We have to reckon with the parliament and not just with national governments. We think this is cleverly done - so that we are exactly in the middle between net payers and the parliament. That was intentional."

But member states, eight of whom have already formally objected in a letter, see the move less as clever politics and more as a sleight of hand by the commission.

"So why don't we just put it in the budget then," asked Michael Claus, head of European affairs in the German foreign office, also present at the debate hosted by German region North Rhine Westphalia. "Why does it have to be outside the budget?"

Pointing out that France and Italy and others simply no longer have the money "to transfer to Brussels", he said he thought the budget would ultimately lie at around 1.0 percent of GNI - but conceded that the commission's proposal this year round was "more realistic" than past efforts.

New elements

The 2014-2020 budget, which also includes proposals for an EU-level Value Added Tax and a financial transaction tax - is not likely to be agreed before 2013.

The negotiations are always fractious but this round has two new elements - the dire state of public finances in the member states as well as parliament's increased powers.

The treaty says member states draw up the details of the budget which have to be approved by MEPs. There is no provision allowing them to make amendments.

However, the same article also specifies that MEPs, governments, and the commission "shall take any measure necessary" to facilitate the adoption of the budget - words likely to be used to the fullest by the parliament.

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