Tuesday

12th Dec 2017

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

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.

Romania wants EU signal on Schengen membership

Bucharest expects other member states to decide on its accession to the passport-free area before it takes the rotating EU presidency on 1 January 2019 - amid criticism of a controversial new justice reform.

News in Brief

  1. EU to Israel: Don't expect us to move embassies
  2. EU Commission condemns anti-semitic 'Jerusalem' protests
  3. Ministers have 'lots of questions' on new CAP plans
  4. Commission: Brexit agreement is 'deal between gentlemen'
  5. 25 EU states sign defence cooperation pact
  6. Netanyahu wants 'hardy' talks with EU on Jerusalem
  7. French centre-right elects new leader
  8. Germany and UK increase arms sales

Stakeholders' Highlights

  1. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  2. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  3. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  4. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  5. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  6. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  7. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  8. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  9. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties
  10. EPSUEU Blacklist of Tax Havens Is a Sham
  11. EU2017EERole of Culture in Building Cohesive Societies in Europe
  12. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage

Latest News

  1. Alignment with EU is 'last resort', May tells MPs
  2. Iceland: further from EU membership than ever
  3. Israel presses Jerusalem claim in EU capital
  4. From dark coal toward a brighter future
  5. UK casts doubt on EU deal in 'bizarre' twist
  6. Romania wants EU signal on Schengen membership
  7. Germany says China using LinkedIn to recruit informants
  8. No chance of expanding EU warrant crime list

Stakeholders' Highlights

  1. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  2. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  3. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  4. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  5. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  6. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  7. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  8. Dialogue PlatformThe Turkey I No Longer Know
  9. World Vision7 Million Children at Risk in the DRC: Donor Meeting to Focus on Saving More Lives
  10. EPSU-Eurelectric-IndustriAllElectricity European Social Partners Stand up for Just Energy Transition
  11. European Friends of ArmeniaSignature of CEPA Marks a Fresh Start for EU-Armenia Relations
  12. Nordic Council of MinistersNordic Energy Ministers Pledge to Work More Closely at Nordic and EU Level