The fight over the EU’s long term budget for 2014-2020, also known as the Multiannual Financial Framework, is heating up ahead of the Council summit on the 22nd and 23rd of November which is focused solely on the MFF.
The battle over the figures was also accompanied by a battle with words and threats on vetoing the MFF. British Premier David Cameron said at the EU summit of 18th-19th October that he would veto the MFF if he did not consider it to be in the interest of his country’s taxpayers. The European Parliament reminded the Council it too has veto right on budgetary issues under the Lisbon Treaty.
Germany is trying to intermediate by playing the role of the honest broker. Acting upon this aim Germany’s Chancellor Angela Merkel arriveed at the Parliament on 7th November and addressed MEPs, before going to London to meet with her British counterpart.
The negotiations on the MFF are complicated and confusing to those working within the institutions, let alone those outside.
Overall, the negotiations over the MFF began on 29th June, 2011 as the European Commission presented its proposals for the MFF 2014-2020. It recommended raising the budget framework from the current €976 billion to €1.025 billion. This represents a 4.8% increase, which is beyond the average 2% inflation recorded in the last decade.
Reacting to the Commission MFF proposal, the European Parliament adopted on 23rd October an interim report on the MFF. In the adopted text we underlined that the Commission’s MFF proposal was insufficient to finance the priorities the EU has set itself. We also challenged the Council “to clearly and publicly identify which of its political priorities or projects should be dropped altogether,” in the case that it advocates cuts.
On 29th October, the Cypriot Presidency published the so-called ‘negotiating box’ with concrete figures on spending for the 2014-2020 MFF. In the document the Cypriot Presidency proposes cuts worth €50 billion across all budget headings, or categories.
Yet, taking into account the financing of space-related projects which were planned outside the long-term budget but included in Nicosia’s “negotiating box” (for example Galileo, ITER, GMES), the real figure is close to €70 billion.
Keeping to our previous stand on the MFF, the Parliament strongly denounced the Cypriot negotiating box, warning that the proposal puts EU policies in jeopardy since the deepest cuts are made precisely in the policy areas that are considered vital for stimulating competitiveness, growth and employment.
While it remains to be seen whether the UK, or any other Member State will exercise its veto power or accept a compromise, the European Parliament has a choice – to either accept a bad agreement or define it by using the granted veto.
If by early 2014 no MFF regulation is in place, the ceilings of the previous year (2013) will be rolled over and adjusted according to a 2% fixed deflator until a new act is adopted.
No agreement on the MFF is a bad sign to foreign investors and economic markets, and it is an even worse signal to EU citizens whose social and economic interests are at stake.
Greetings from the European Parliament,
Lidia Geringer de Oedenberg