Efforts continue for deal on EU’s 2013 and 2014-2020 budgets

Written by on November 21, 2012 in Bulgaria, Europe, News - No comments

Efforts to achieve agreement on the European Union’s seven-year budget known as the Multiannual Financial Framework were continuing ahead of a two-day special European Council summit of the bloc’s heads of state and government starting on November 22 2012.

The European Commission initially proposed a budget of just more than a trillion euro for 2014 to 2020 but the European Council has responded with a 976 billion euro counter-proposal.

A key issue touches on the Cohesion Policy, the funds to narrow discrepancies in the development of the various regions of the EU. Bulgaria is among other Central and Eastern European countries that wants the Cohesion Policy to fulfil its role in economic growth and job creation to the long-term benefit of the whole bloc.

But most net contributors to the EU budget strongly back cuts.

In preparation for the extraordinary meeting of the European Council to be held at the end of the week on the Multiannual Financial Framework, EU foreign ministers spoke with European Council President Herman van Rompuy. “The member states seem determined to do their utmost to achieve an agreement on the budget at this point. If we still do not have an agreement at the forthcoming European Council, it will be a question of judging whether and how to achieve agreement at the beginning of next year or later next year,” Bulgarian Foreign Minister Nikolai Mladenov said. Some EU member states have made a very strong case for reducing the overall level of expenditure in the 2014-2020 EU budget and from our point of view, the question is where these cuts will be made, he said.

Bulgaria and the Friends of Cohesion group insist that the least of these cuts affect the Cohesion Policy. Bulgaria proposes instead that opportunities be examined to cut costs of some the large and expensive projects such as Galileo and Connecting Europe, among others, and by cost-cutting at European institutions.

The Friends of Better Spending, with most of the countries that are the biggest contributors to the EU at its core, is arguing for a tightly-clenched fist on the purse strings, and at that a household budget that takes account of the bloc’s economic troubles and the decisions by several countries to take the route of austerity. When even the best-off EU states are cutting back, they argue, the bloc itself should hardly be in expansive mood when deciding about spending.

The Friends of Better Spending, made up of Germany, France, Finland, Austria, Sweden and the Netherlands, want an EU that has its feet firmly on the ground of a continent that currently is cold and stony. They favour, among other things, macroeconomic conditionality, the notion that even budgeted-for structural funds could be suspended from member states that conduct inappropriate economic policies. They target, in particular, the Cohesion Policy.

European Parliament political group leaders were scheduled to debate the EU’s 2014-2020 budget with the Cyprus Council Presidency and the European Commission on the morning of November 21, ahead of Thursday’s European Council on the same topic.

The many proposals and demands made over the past week show that it is extremely difficult for the heads of state and government to agree on future policies for the EU, the European Parliament said in a media statement.

Political group leaders are expected to send a strong signal to the member states on Parliament’s position, also underlining that its approval is needed for any agreement, the Parliament said.

Meanwhile, the European Parliament, the Cyprus Presidency and the Commission were scheduled to debate how to break the deadlock on the EU budgets for 2012 and 2013, at a meeting set for the afternoon of November 21. Because the European Council and European Parliament could not reach a conciliation agreement, the Commission must present a new draft budget for 2013. Meanwhile, a number of 2012 programmes are paralysed by funding shortfalls and the Commission can no longer pay any bills.

Despite a joint declaration signed by all member states last year that they would act swiftly to remedy any shortfall, a blocking minority in the Council is refusing to act. This minority argues that the Commission should find the money in what remains of the 2012 budget, the European Parliament said.

Related stories:

Which group of ‘friends’ can win the EU budget battle?

(Photo: Gilles Letar/sxc.hu)

 

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