US bugging allegations in spotlight this WEEK

The latest round of the controversy comes in what is otherwise expected to be a quiet week as the EU institutions wind down for summer.

On Wednesday (3 July), MEPs in Strasbourg will quiz the European Commission on its response to the allegations, which threaten to derail bilateral trade talks between the EU and the US are set to open in Washington next week.

The Green group of MEPs became the first to urge Brussels to suspend its Swift and PNR data sharing agreements with the US pending an investigation.

The UK is also expected to come under fire over its Tempora programme, which allegedly involves snooping on other member states, which some deputies claim is in breach of international law.

On Tuesday, commission president Jose Manuel Barroso will be in the Alsatian town, where MEPs are holding their final plenary session before the summer recess, to debate last week's European Council summit with deputies.

The summit was widely seen as a non-event. A minor diplomatic spat between France and Britain over the latter's EU budget rebate, and the confirmation, for the umpteenth time, of a youth guarantee scheme to offer employment, education or training to under 25s, were the only noteworthy events.

The following day MEPs are expected to give their final approval to the EU's seven year budget framework, worth €908 billion between 2014-2020.

Under the deal struck between MEPs and governments last week, hours before the summit, a flexibility mechanism will allow unspent funds to be carried over across budget year and headings. There will also be a review of the EU's spending programme in 2016, midway through the next legislative term.

The settlement, which would represent a cut of around 3 percent from the 2007-2013 budget framework, falls a long way short of what the parliament and commission had hoped to secure.

However, with governments across the bloc putting in place national austerity budgets, it became inevitable that EU spending would have to be reined in. EU leaders agreed on the €908 billion at a "budget summit" in February and refused to budge from it in negotiations with MEPs.

Elsewhere, on Wednesday some 20 EU leaders are expected in Berlin for a conference hosted by Chancellor Angela Merkel looking at "best practices" on getting youngsters a job.

Heads of national employment agencies and labour ministers are also participating in the event, which comes less than a week after an EU summit also mainly focusing on youth unemployment.

That same day in Strasbourg, EU deputies will adopt a report drafted by German centre-right MEP Ingeborg Grassle, on the work of the EU's anti-fraud office Olaf.

They will also vote for the next EU ombudsman, with several MEPs in the running to replace the Greek incumbent Nikiforos Diamandoros.

Barroso and justice and home affairs commissioner Viviane Reding will be in Croatia on Monday (1 July) to celebrate the Balkan country's first day as the 28th member of the EU.

It is also the first week of Lithuania's chairmanship of the EU's six month rotating presidency.

Meanwhile, the Frankfurt-based European Central Bank will hold the final meeting of its governing council on Thursday, but is expected to leave headline interest rates unchanged.