EU budget on the brink after talks collapse

10.11.12 @ 13:48

  1. By Benjamin Fox
  2. Benjamin email

BRUSSELS - Negotiators on Friday (9 November) could not reach agreement on how to fund a €9 billion shortfall in 2012 EU spending, let alone on the full 2013 budget.

The European Commission tabled the €9 billion top-up request in October in order to keep up payments for flagship EU policies such as the Erasmus student-exchange programme and the European Social Fund, which compensates redundant workers.

But MEPs, ministers and EU officials could not agree on where to find the "emergency" money.

At one point, it looked like Italian regions hit by an earthquake earlier this year would not even get a previously-agreed €670 million aid package. But EU countries later confirmed it will be paid.

The dispute ended in bad faith and recriminations.

It also meant that negotiations were cut short before "substantive" talks on the 2013 EU budget could begin.

The French centre-right MEP who chairs parliament's budget committee, Alain Lamassoure, deflected reports that his handling of the situation prompted a walk-out by EU ministers.

"I would say that it was the ministers who didn't walk in," he told press.

For his part, budget commissioner Janusz Lewandowski, a Pole whose country is battling for a big EU purse, said redeployment of existing 2012 EU funds can only stretch to €400 million - nowhere near enough to fill the €9 billion hole.

"We need €9 billion. How to manage it is for the European Parliament and governments. We are at the limits of possible redeployment," he said.

The talks are to reconvene at 7pm Brussels time on Tuesday ahead of a deadline at midnight.

If no deal is reached on next year's EU spending - worth up to €138 billion - by the cut-off point, the commission will be forced to table a new 2013 budget proposal in the coming weeks.

The mess is a bad omen for the EU summit on 22 November, when EU leaders aim to get agreement on the Union's €1 trillion spending plan for 2014 to 2020, also known as the multiannual financial framework [MFF].

Cyprus' deputy EU affairs minister, Andreas Mavroyiannis, who chaired Friday's meeting, played down the problems.

He said delegates skipped the debate on 2013 for "procedural and technical." He added: "We had very fruitful discussions ... and I believe we stand a good chance of agreement on Tuesday evening."

He noted that a budget deal on Tuesday would "improve the atmospherics" for the summit.

But he claimed there are "no links between these discussions and the discussions on the MFF."