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14th Aug 2022

Parliament ready to strike deal on EU budget

  • A deal in sight on the EU budget? (Photo: Images_of_Money)

MEPs are ready to accept the 3 percent EU budget cut agreed by governments in return for more flexibility, according to documents seen by EUobserver.

A draft resolution setting out the European Parliament's negotiating stance makes no mention of the figures agreed by EU leaders. Instead, MEPs would condition their support on governments agreeing to a "compulsory and comprehensive revision, a maximum overall flexibility, an agreement on own resources and the unity of the EU budget."

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EU leaders agreed a deal worth €960 billion in commitments and a payments ceiling of €908 billion at February's EU summit. The deal, which covers seven EU budgets between 2014 and 2020, represents a 3 percent real terms cut to the bloc's spending.

Parliament seemed set for a showdown with governments after the leaders of the assembly's four main political groups denounced the agreement at a hearing in February with European Council President Herman van Rompuy and European Commission chief Jose Barroso.

Joseph Daul, the French leader of the centre-right EPP, led the charge, describing the deal as a "carpet seller's" budget.

But with member states adamant that EU spending must be restrained at a time of national budget cuts, attitudes are softening.

The resolution already has the support of the parliament's three largest political groups and is expected to obtain a large majority from MEPs on Wednesday (13 March).

"Trialogue" negotiations between MEPs and ministers are then expected to start within weeks.

A senior parliament source told EUobserver that "the dates of the trialogues have been pencilled in," with a view to completing an agreement in June before the end of the Irish presidency.

Parliament wants a review clause to do a full evaluation of the budget following next year's European elections. It also wants agreement to be reached on the future of the EU's "own resources," which includes revenue from VAT and, in the future, from a financial transactions tax.

Meanwhile, a flexibility mechanism would allow funds to be transferred between years and the different budget headings.

The assembly is also expected to demand detailed figures from the European Council on the allocation of funds.

It states that MEPs "must have all relevant information at the disposal of the commission on the level of agreed national allocations under cohesion and agricultural policies, including the derogations and specific allocations to each Member State."

Parliament is also insistent on resolving a funding gap that has left multi-billion euro shortfalls in recent EU budgets.

It wants the European Commission to swiftly table an emergency budgets to cover a shortfall carried over from the 2012 budget estimated to be between €2.5 and €3 billion. A package worth up to €16 billion is also expected to be tabled to fulfill EU spending commitments for 2013.

A parliament official commented that "unless there is movement on all of these priorities, the parliament will reject," adding that "the current proposal on the table is unacceptable".

In response, a Council official told this website that resolving the 2013 budget was a "big hurdle to overcome" and that governments would be unwilling to dip into their pockets to fund a shortfall.

However, he added that there was "room for manoeuvre" on the parliament's other demands.

"There should be the scope for a deal," he said.

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