Saturday

22nd Feb 2020

Stage set for budget showdown as MEPs back spending hike

  • The straight-talking Polish Commissioner Janusz Lewandowski (Photo: ec.europa.eu)

The EU is set for a budget-showdown between government ministers and the European Parliament after MEPs backed spending hikes for the 2013 settlement and the next seven year budget framework.

During a marathon voting session in Strasbourg on Tuesday (23 October), MEPs demanded "significant increases" in spending on infrastructure projects and research and innovation.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

They also voted to keep spending on the controversial common agricultural policy and cohesion funds aimed at the poorest regions of the EU at their 2007-13 spending levels. They also want to ensure that the planned financial transaction tax, set to be adopted by eleven member states, is considered with VAT as an 'own-resource' to be used to reduce the budget contributions of the countries using it.

The seven year Multi-annual Financial Framework (MFF) sets the ceiling for up to €1 trillion of EU spending between 2014 and 2020, estimated at 1.03% of EU GDP. Five north European countries, led by Germany, France and the UK, insist that they will oppose any increase of the seven year budget cycle above the inflation rate.

A special EU budget summit has been convened for the 22-23 November in a bid to agree a negotiating mandate for the member states who will then do battle with a three-man team led by French centre-right MEP, Alain Lamassoure, from the Parliament's Budget committee.

Bulgarian centre-left member, Ivailo Kalfin, another of the EU assembly's budget team, said "the EU budget is an investment tool to support long-term development and strategic European co-operation." In a sideswipe at member states, he added that funds were needed to put the much heralded 'Growth and Jobs pact' agreed by EU leaders in June, into reality.

Meanwhile, in a veiled threat to UK Prime Minister David Cameron, German centre-right deputy Reimer Böge warned that failure to reach agreement would be "very costly for the UK". If a deal between governments and the parliament is not reached the 2013 budget would roll over into 2014, with an automatic 2 percent inflation-based increase.

The parliament also defied member states on the 2013 settlement, backing the Commission proposal for a €9 billion increase on 2012, taking the budget to €138 billion. The EU executive has argued that the extra cash is needed to cover bills for existing projects agreed by member states.

The commission also published plans for an emergency budget to plug an estimated €9 billion shortfall for payments.

Polish EU Budget Commissioner Janusz Lewandowski blamed national governments for the funding shortfall, telling them that the extra cash was needed because "you spent too much" and stating that the budget was needed to reimburse payments made by member states.

"I have repeatedly warned that constant cuts in the proposed budget will eventually create a big problem. This time has come. Our situation does not allow us to deliver on our agreed commitments," he said.

Ministers and MEPs should "now take their responsibilities since they voted an EU budget below its needs," he added.

The EU executive confirmed that the Erasmus programme, which funds students to take courses in other EU countries, needed a €90 million injection to maintain payments, while €423 million was needed for research programmes "in order to pay in time and avoids interest on delayed payments."

Lewandowski singled out Spain and Italy for making late payment requests that could not be covered by the 2011 budget and had been rolled over onto the 2012 deal.

However, national governments will only be asked to contribute €5.9 billion, with most of the remaining €3.1 billion expected to come from fines resulting from anti-trust and competition policy violations.

UK threatens to veto EU budget

British conservative Prime Minister David Cameron has said he will block the upcoming EU seven-year budget cycle if it goes against UK interests.

New EU budget proposal cuts across red lines

The Cypriot presidency has proposed cutting €50 billion off EU spending plans for 2014 to 2020 - a number that could trigger national vetoes and strikes by EU staff.

News in Brief

  1. Bulgarian PM investigated over 'money laundering'
  2. Greenpeace breaks into French nuclear plant
  3. Germany increases police presence after shootings
  4. NGO: US and EU 'watering-down' tax reform prior to G20
  5. Iran: parliamentary elections, conservatives likely to win
  6. Belgian CEOs raise alarm on political crisis
  7. Germans voice anger on rise of far-right terrorism
  8. EU leaders' budget summit drags on overnight

German ex-commissioner Oettinger lands Orban job

Hungary's PM Viktor Orban appointed controversial former commissioner Guenther Oettinger to a government council in a way that might break EU rules. Oettinger claims he did not know about the appointment.

Opinion

Why Miroslav Lajčák is the wrong choice for EU envoy

The EU could blow up the Kosovo-Serbia negotiations' reset. Should Miroslav Lajčák indeed be appointed, the two senior EU diplomats dealing with Kosovo would both come from the small minority of member states that do not recognise Kosovo.

Stakeholders' Highlights

  1. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  2. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  3. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  4. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  5. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  6. Nordic Council of MinistersNordic Climate Action Weeks in December

Latest News

  1. No breakthrough at EU budget summit
  2. EU leaders struggling to break budget deadlock
  3. German ex-commissioner Oettinger lands Orban job
  4. How big is Germany's far-right problem?
  5. Plastic and carbon proposals to help plug Brexit budget gap
  6. Sassoli repeats EU budget rejection warning
  7. Why Miroslav Lajčák is the wrong choice for EU envoy
  8. Unhappy EU leaders begin budget haggle

Join EUobserver

Support quality EU news

Join us