EU parliament vows not to cave in to budget pressure

The German EU presidency, representing the council of member states, and parliament negotiators have been meeting to fine tune the agreement, but key differences persist.

The parliament argued it was quick to come up with its own position on the main issues by the end of August, while member states have been slow to hammer out their own stance and put forward compromises.

"We can do it [the agreement] quickly but we need political resolve, everybody must take their responsibility," parliament president David Sassoli told reporters after meeting EU leaders at the start of their summit.

He said the parliament was not the one doing any blocking.

"The delays are due to a lack of counter-proposals from the council," Sassoli said, adding that "the parliament hasn't created the problem".

EU leaders have been in talks about the seven-year budget for years - but now want to put the onus on the assembly, according to MEPs and parliament officials.

The parliament also argues that money for the recovery fund could go ahead already if the member states would not treat the 2021-27 budget and the recovery fund as one package.

Several member states are holding back on ratifying key legislation on the recovery fund until the ongoing issue of linking respect for rule of law to the distribution of EU funds is settled.

On Wednesday, a majority of the bloc's 27 governments approved a compromise proposal by the German EU presidency over how exactly to make EU funds conditional on upholding the rule of law.

Poland and Hungary opposed the proposal, saying it went beyond what national leaders agreed in July. Finland, Sweden, Finland, Denmark, Belgium, Luxembourg and the Netherlands demanded tougher conditions.

But the parliament also dislikes the German proposal.

"We would like it to be improved," Sassoli said of the draft text.

A majority of MEPs in the civil liberties committee, representing the majority of parties in parliament, also dismissed the German presidency's proposal as not enough.

They demanded an almost automatic triggering of the suspension of funds in case of a member states does not respect the rule of law - something that is foreseen as being in the hands of a majority of member states according to the German paper.

Centre-right MEP Tomas Tobe from the European People's Party said it is "very far from sufficient", adding that the "most dangerous thing is that we will end up with a mechanism that will not work".

German centre-left MEP Birgit Sippel said "democrats in all EU institutions need to stick together to fight 'ill democracies' and little dictatorships in Europe", in reference to the latest row between Hungary and the EU commission.

Liberal MEP Sophie in 't Veld said the scope of the current, watered-down proposal needs to widen, and that only focusing on fraud and corruption is not enough. "It is already illegal, it is a crime," she quipped.

But Sassoli said that rule of law is not the only outstanding issue between member states and the parliament.

The parliament also wants to see more funds for 15 flagship European programmes such as the Erasmus student exchange program, which was cut in July by leaders.

"Some programmes have been penalised which are in the interest of citizens," he argued.

Negotiators will meet again next Monday.