MEPs warn of 'significant gaps' in budget talks

MEP Johan Van Overtveldt, the chair of the budget committee and also part of the negotiating team, said the parliament expects changes to the deal.

"From the first trilateral meeting it is an understatement to say that there is significant gap to be bridged between EP [parliament] and position taken by the council," the Belgian politician told fellow MEPs.

"The parliament expects tangible improvements to the package, not just declarations to make us 'swallow the bitter pill', to quote commission president Ursula von der Leyen," Van Overtveldt added.

He said the parliament's "overarching concern is to make sure that the next budget is equipped for the recovery but also for longer term".

Van Overtveldt said if parliament's requests are not "sufficiently met" by the end of the October, the parliament will start work on the contingency plan on the basis of the current budget.

Parliament's consent is required for the budget. It also needs to gives the green light to the so-called new 'own resources', new revenues of the EU budget, which will then need to be ratified by member states, and make the recovery fund possible.

The parliament adopted its position in July, arguing that it "does not accept, however, the political agreement on the Multi-annual Financial Framework 2021-2027 [EU budget] as it stands".

Meanwhile, senior EU officials have put pressure on the parliament to agree to the leaders' deal quickly - as the budget and the recovery fund needs to kick in at the start of 2021.

German state minister on EU affairs Michael Roth on Tuesday told the budget committee that the deal was reached at one of the longest and "nerve-racking" EU summit.

"What we have here is something that required movement from all sides. I can't see any room for manoeuvre for major changes in the amounts," he insisted.

Roth said the budget and recovery cannot be negotiated separately, and by the end of September, as there needs to be a political agreement on it.

Centre-right MEP Jan Olbrycht, who is also on the parliament's negotiating team, said that the reduction in spending on "flagship" EU policies, such as student exchange Erasmus program, or border control, should have been compensated by the recovery fund.

Olbrycht said those cuts should be compensated for in the recovery fund, and the cuts in its current form cannot be accepted by the parliament.

"We are not discussing money, we are discussing the scope of European policies," the Polish MEP said.

Olbrycht added that the conclusions of the EU summit were a mandate for the ministers, and the parliament has a different mandate, and argued that there needs to be a compromise between the positions.

Strong link

Another key disagreement between MEPs and the council is on the rule-of-law conditionality, that is, making some EU funds dependent on respecting EU rules.

The EU summit's conclusion on the issue were vague, as Hungary and other member states rejected the idea of EU funds being linked to the overall condition of the rule of law in specific countries.

Four parliamentary groups last week argued to German chancellor Angela Merkel and EU Commission president Ursula von der Leyen for strengthening the link - originally designed to give a more effective tool for the EU to discipline member states that breach common rules.

Roth acknowledged that the "wording did include some freedom when it comes to possible interpretation", however, he insisted the tool was a "turning point", as it was the first time there is a rule of law conditionality included in the budget.