25th Oct 2016

Leaders break off EU budget talks

  • National positions were 'too far apart' for a deal on the EU budget (Photo: Valentina Pop)

EU leaders on Friday (23 November) decided to break off the 2014-2020 budget negotiations and postpone them for another summit, as a second compromise attempt failed to reconcile positions between those wanting cuts and those asking for more money.

Admitting that there are "still existing divergences," EU council chief Herman Van Rompuy at a press conference said that leaders had given him the task to continue bilateral talks in the coming weeks, with a view to a final deal early next year.

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EU commission chief Jose Manuel Barroso will also be involved in what he described as "complex, difficult, but constructive talks."

The tone was set already in the morning when most leaders expressed scepticism that a deal would be reached. "Positions are too far apart, but as I said before it would not be dramatic if we need to come back next year," German Chancellor Angela Merkel said on her way into the discussions.

EU diplomats conceded that there was not enough pressure for the leaders to agree already now for a budget framework that will start on 1 January 2014. The seven-year budget agreed in 1999 was agreed after poisonous debates only nine months before it should have started and in 2005, it was sealed 12 months before.

"We are well within the normal calendar. There will be no drama if there is no deal this weekend," a German official told journalists in Berlin on Thursday.

The Prime Ministers of Austria, Luxembourg, Finland, Netherlands struck a similar tone, downplaying expectations about a deal on Friday.

Meanwhile, British Prime Minister David Cameron dismissed the latest draft budget tabled the night before by EU council chair Herman Van Rompuy as "tinkering with figures" instead of making real spending cuts. "We need a real cut, that's what's happening at home, that's what needs to happen here," he said.

But neither were eastern member states happy. According to one participant at the debates, Romanian President Traian Basescu lashed out at the proposal and demanded more for cohesion and agriculture aid.

Romania however has used less than ten percent of the €20 billion allocated for 2007-2013 and the EU commission has frozen all the funds for this year due to irregularities in the public tenders. The non-used money flows back to member states.

Commenting on the negotiations, Liberal leader and former Belgian Prime Minister Guy Verhofstadt said the whole summit looked like a "Turkish bazaar" where everyone needs to show they fought for a good deal, even though the sum is tiny compared to what national budgets are.

The one-trillion-euro budget for 2014-2020 is only one percent of EU's total gross domestic product, compared to 24 percent of the federal budget in the US, Verhofstadt stressed.


Europe ready to tackle Greek debt relief

The Greek government has built and broadened alliances in EU institutions and member-states that acknowledge the need to restructure the debt and deliver another economic model for the eurozone.

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