European policy consultants
Rural development and renewable energy

Are budget negotiations in crisis?

Talks on the EU budget for 2013 broke down on 9th November, a development which does not bode well for separate negotiations later in the month on a new long-term EU budget for the period to 2020.

A meeting between member state governments, the European Parliament and the EU Commission was suspended after eight hours of talks became deadlocked. It was resolved to resume discussions on 13th November to make a fresh push for a deal before a crucial legal deadline expires at midnight that night.

Budget Commissioner Lewandowski could only say he would do his utmost to ensure 'that by Tuesday 13 November at midnight the European Union will have a budget for next year, a budget that combines the needs for restraint and for providing the EU with the means to implement agreed measures towards growth and jobs as well as fulfil its duties.'

If differences cannot be settled on 13th November, the commission will be legally obliged to develop a new budget proposal from scratch with the aim of reaching agreement by the end of the year. This would greatly complicate parallel talks on a €1 trillion EU budget for the period from 2014 to 2020.

The Daily Express (10th November) had an unusual angle on the budget talks reporting that 'senior Eurocrats' (which in Express speak usually means one or more European Commissioners) were openly speculating after the aborted meeting that Britain could soon leave the EU.

Referring to the separate negotiations on the MFF, their sources said "we're working to reach an agreement but everything indicates that it is impossible to overcome the British veto. David Cameron has gone too far and wil not come back ... the possibility of Britain's exit from the EU is no longer considered taboo".

During the meeting on the 2013 budget, European Parliament President Martin Schulze led a walkout by MEPs, while Budget Commissioner Janus Lewandowski warned that, unlike on the MFF, Britain does not have a veto on the annual budget negotiations, and can be outvoted.

Herman van Rompuy, President of the European summit has proposed cuts to the EU budget which would reduce pillar 2 by nearly 20% over the six-year framework period.

The revised budget proposals will be discussed by EU leaders in Brussels on 22nd November. Although the meeting is likely to be extended over the weekend, no agreement is likely this month, though it is possible an agreement will be reached before the December deadline.