EU set to agree 2013 budget after Commission climb-down

The deal was agreed by negotiating teams from the three EU institutions last Friday (30 November) with the details only revealed on Tuesday. Parliament's three main political groups: the centre-right European People's Party, the Socialists, and the Liberals, are all likely to back the deal.

Under the proposal, the commission's demand for an additional €9 billion to cover unpaid bills for 2012 has been reduced to €6.1 billion. The money is needed to fill a funding gap for flagship EU projects including the Erasmus scheme, which funds student exchange programmes, as well as the European social fund, which assists workers who have recently been made redundant.

The 2013 annual budget will rise by 2.9 percent to €132.8 billion, higher than the freeze demanded by national governments, but well below the €138 billion requested by MEPs and the commission.

However, senior parliament sources said that the extra €6.1 billion would only cover payments for the first ten months of 2012, meaning that unpaid bills from November and December would be carried over into next year.

MEPs on the influential budget committee will now take a formal vote on the proposals next Monday in Strasbourg before moving to a vote in plenary. The deal is also subject to approval by ministers but, unlike the seven year multi-annual financial framework, can be adopted with a qualified majority.

The Green group were the first to break ranks with Budget spokesperson Helga Trupel commenting that the deal would be "committing the EU to a continued cycle of under-budgeting and shortfalls for programmes already committed to". She accused the big political groups of a "volte face".

There is also likely to be internal disagreement in the Socialist group, with German deputy and Budget committee member, Jutta Haug, accusing Alain Lamassoure, the French centre-right MEP leading negotiations for the assembly, of having "sold us down the river."

Others believe that refusing the new proposal would inevitably lead to a higher budget since payments must automatically rise in line with inflation if an annual budget cannot be agreed.

Some in the parliament are also critical of Polish Budget Commissioner Janusz Lewandowski. After negotiations collapsed three weeks ago, Lewandowski told reporters that the €9 billion figure was non-negotiable.

Meanwhile, Parliament President Martin Schultz issued a statement insisting that the commission and government ministers should sign a declaration guaranteeing that outstanding bills from 2012 would not be covered by being shifted to the 2013 budget.

"The necessary guarantees for this must be delivered at the highest levels of the institutions: there is no margin left for interpretation", he said, adding that the spending guarantee was a "precondition for a final positive vote in the parliament."