EU MEMBER states are angling to freeze the union’s budget next year, laying the ground for difficult talks in the autumn with MEPs.
As they grapple with austerity in their domestic budgets and the sovereign debt crisis in the euro zone, European governments have resolved to limit the increase in the annual EU budget next year to 2.02 per cent.
Their proposal would bring payments from the EU budgets to some €129.1 billion.
It amounts to a rejection of a proposal from the European Commission for a 4.9 per cent increase. Under the European system it falls to the commission to “initiate” a proposed annual budget for the EU.
However, the eventual figure is subject to agreement between governments and the European Parliament. Conflict is widely held to be inevitable. The powerful Socialist group of MEPs has already declared the commission’s proposal to be “minimal”.
The talks last year were especially contentious as governments faced down MEPs’ demands for a 5.9 per cent rise, with an eventual rise of 2.91 per cent in the budget.
In the top echelons of many member state governments, the parliament’s stance was held to be wholly unjustifiable in the light of the fiscal pressures on most European countries.
The European Council, which is the assembly of member states, said the proposal for 2012 endorsed by governments closely corresponded with the commission’s forecast for a 2 per cent inflation rate in 2012. This would lead “in real terms” to an EU budget freeze, it said.
“The council’s position takes due account of the member states’ fiscal consolidation efforts whilst allowing the financing of the EU priorities (such as measures aimed at tackling the effects of the crisis and at promoting growth).”
The council’s decision – backed by a qualified majority of member states, including Ireland – was adopted by a vote of member states. The Austrian, Danish, Finnish, Dutch, Swedish and British governments voted against the proposal, but are bound by the result.
The council’s stance serves as a mandate to Poland’s rotating presidency of the EU to negotiate the 2012 EU budget with the parliament. MEPs are expected to adopt their position at the end of October.
Assuming the positions of the council and the parliament diverge, as expected, a three-week conciliation process will start on November 1st.
Talks last year went down to the wire, with a prolonged deadlock threatening to see the 2010 budget rolled over into 2011.
EU budget commissioner Janusz Lewandowski has praised “Europe’s self-restraint” in its proposal for a 4.9 per cent rise, which he said was necessary to pay bills for projects already under way. Such a rise was required to meet “legal obligations”, he has said.
In separate talks, the commission has proposed a 5 per cent increase in member state contributions to the EU’s seven-year fiscal plan for the years 2014-2020. This has met resistance from Germany, France, Britain, Denmark and the Netherlands.