EU’s long term Budget: are we there yet?

Negotiating the EU’s long term budget, MFF 2014-2020, is like playing a very slow game of ping pong, where the ball goes back and forth.
Unlike an ordinary game, which can be entertaining, playing with sums equivalent to about 1% of total output (GDP) across the EU countries is not particularly amusing…

There have been many developments concerning the MFF negotiations; therefore I shall start this post with a short recap of what has happened over the last months:

On 8 February, the European Council reached a deal on the MFF that decreases for the first time EU’s budget for 2014-20 by 3%, making the levels of payments similar to those in 1988-1989.

In the plenary vote of 13 March we, Members of Parliament, reacted to that deal.

By an overwhelming majority of 506 votes to 161 we decided to reject the Council’s proposal, further stressing that the Parliament will not begin negotiations on the MFF 2014-2020 until standing payments for the current MFF framework 2007-2013 have been determined.

At the end of March 2013 EU Commissioner responsible for financial programming and the budget, Mr. Janusz Lewandowski, put forward a request to add €11.2 billion to the 2013 budget to pay for commitments made for 2013.

Not very surprising, Mr. Lewandowski’s request was not well received by the Council. The irony is that the Council already approved these commitments for which the additional funds are requested, and now it refuses to pay the bills.

Consequently, and in accordance with the 13 March resolution, the Parliament negotiating team decided to not to attend any meetings on the MFF 2014-2020 until the Council provides real guarantees concerning payment of the short-fall funds for 2013, also known as draft amending budgets.

Breaking the deadlock

On Monday, 6 May, a trilateral meeting was held between representatives of each institution, aiming to end the stalemate on the MFF negotiations.
At the meeting leaders have agreed on a two stage framework which will allow formal negotiations on the MFF to begin, parallel to negotiating the draft amending budget for 2013. On the latter, the Irish Presidency has tabled a proposal for a first tranche of €7.3 billion, to be submitted to the EU Council of Financial Ministers (ECOFIN) for approval on 14 May.
The Presidency of the Council said it will work with Member States on a political commitment regarding the remaining €3.9 billion, and on how they will meet the remaining obligations by early autumn. 

With this framework in place the Parliament announced it will attend the trialogue meeting on the MFF, scheduled for 13 May.

The MFF negotiations will begin on the basis of the European Council conclusions of February 2013, where the Parliament will focus on four main points: greater flexibility provisions, a mid-term review, new ways for the EU to raise money itself rather than relying on commitments from Member States, and the unity of the budget.

While the Irish Presidency is hopeful that the procedure could be concluded by June, some Member States are very likely to continue resisting any requests to top up payments.  In this aspect next week’s ECOFIN meeting will provide a certain indication of the Council’s next move.

I remain hopeful that the Council takes our position seriously in order to convene, as quickly as possible the negotiations on the MFF.

A reminder, no agreement on the MFF by the end of 2013 means, in budgetary terms, that the 2013 ceilings will be extended to 2014 with a 2% inflation adjustment.

In political terms, no consensus on the MFF will reflect badly on our ability to recover from the ongoing crisis and answer to the socio-economic needs of our citizens.

Greetings from the European Parliament,

Lidia Geringer de Oedenberg

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