Dogfight over EU budget could end in crisis, MEP says

The two issues have become increasingly linked after MEPs in the European Parliament's budgets committee last week proposed a package of amendments to the EU's draft 2011 budget, published by the commission earlier this year.

Among the new lines inserted by the euro deputies in the draft document was a demand for member states to open negotiations on new 'own resources', adding that this element is a "full part of the overall agreement on the 2011 budget."

With several member states directly opposed to the idea of a self-funding EU, the battle looks set to escalate next week when negotiators from the two sides meet.

"I am hopeful that that each institution will have the heart to reach a consensual agreement. If not we will be in crisis," said Mr Lamassoure, a former French minister for European affairs and current chair the European Parliament's budgets committee.

EU financing arguments have precipitated major European crises in the past, including the 1965 'empty chair' policy adopted by French President Charles de Gaulle in response to a commission proposal to raise its own resources to pay for the common agricultural policy.

This time round, Mr Lamassoure and other MEPs are seeking to frame the issue of own resources as way to reduce national contributions to the EU budget at a time of European austerity.

As both governments and national parliaments would have to approve any change is this direction, Mr Lamassoure says he is open to any revenue-raising ideas that could garner the support of this 'double unanimity'.

"If our citizens are furious against the banks which led us into the current crisis, and they find it acceptable to make them pay, either by a direct tax or one of profits - moi je dis bravo," he added.

Some form of financial tax is expected to be among the list of potential funding mechanisms proposed by the commission next Tuesday in its 'budget review' of the current spending period (2007-13).

The following day MEPs will discuss the issue during a plenary session in Strasbourg and vote on the budget committee's list of amendments to the draft 2011 budget. A 'conciliation' committee with representatives from parliament and member states will then have 21 days to agree on a joint text regarding the 2011 spending blueprint.

"We are not closed to the reflection on own resources but it is clear that we can't have additional income for the EU, it must replace existing sources," a French diplomat told this website. "The second issue is that we can't increase the fiscal pressure on our citizens," they added.

One thing is clear however, says Mr Lamassoure. "It must not be called a 'European tax'. Once you mix the words 'Europe' and 'tax' in the same sentence it becomes explosive."

Adding to the volatile nature of the upcoming talks are MEP demands to see the commission's €130 billion budget proposal increased in size, while member states have already indicated they want this figure for next year's EU spending to be reduced by €3.6 billion.