Bursting the Bubble

Multi-annual financial framework negotiations, the EP resists and prepares for a fight!

18 March 2013 | by

We are now entering the final stage of the MFF 2014-2020 negotiations. The long-term budget, which determines EU expenditure for the next seven years, broken down by policy area, may be adopted by the end of this year if the European Parliament gives its consent to the Council’s position. The process started in 2011 and has already gone through a long preparatory phase as well as tough negotiations between Member States.

[caption id="attachment_401" align="alignleft" width="300"] European Parliament Flickr Stream – Creative Commons[/caption]

After the European Council of the 7th and 8th February, the Member States have finally struck a deal for €960 billion long-term budget (€908 billion for payment appropriation), that is to say 1.00% of EU’s gross national income. This represents an important decrease compared to the Commission’s proposal and even Herman van Rompuy’s proposal of last November. Institutional “battles” usually take place in budgetary negotiations. The Council tries to lower down the figures while the Commission and EP stand for higher ones (e.g. the in extremis 2013 budget deal). It is no wonder that the struggle is even tougher in time of crisis, when austerity is the catchphrase. Member States try to push for cuts in the EU budget to reflect the national situation and to look good in the eyes of their electorate.

The main stage of the MFF negotiations:
(in millions of euros)1 Current MFF 2007-2013 Com. amended proposal 07/2012 HVR 2 proposal
22/11/12
EU Council 07-08/02/13 Diff. current and EU Council 07-08/02/13 Diff. HVR 2 and EU Council 07-08/02/13
Heading 1 444 310 503 062 459 691 450 783 1.3% -2%
Sub-heading 1a
Competitiveness for growth and jobs
91 495 164 068 139 543 125 614 38% -11%
Connecting Europe Facility
infrastructure
12 900 40 000 41 249 29 299 140% -29%
Sub-heading 1b
Cohesion
354 815 338 994 320 148 325 149 -10% -1.5%
Heading 2
Agriculture
420 682 389 972 372 229 373 179 -12% < 1%
Direct payments 336 685 283 051 277 852 277 851 -17% 0%
Heading 3
Security and citizenship
12 366 18 809 16 685 15 686 27% -6%
Heading 4
Europe as a global actor
58 362 72 450 60 667 58 704 0% -4%
Heading 5
Administration
56 508 63 165 62 629 61 629 10% -2%
Total 993 601 1 047 458 997 734 973 234 971 901 959 988

 

With one voice, the EP says no to the European Council’s deal

As the British MEP Sir Graham Watson (ALDE) remarked in an interview for EuroparlTV2, the Member States decide on the amount of the budget but the EP should decide on the spending priorities. The European Parliament has constantly been defending its role and prerogatives against the disregard shown by the European Council. The MEPs consider the deal reached by the European Council unacceptable and want to continue negotiating on certain elements. “It’s not roll over and give up but negotiate hard”, declared the British MEP. Indeed, the European Parliament must give its consent to the Council’s position but it cannot adopt amendments. On the 13th of March, the EP Plenary voted in favour a resolution opposing the European Council’s position. The mandate is clear: the EP will not give its consent until certain elements of the MFF are renegotiated.3

What are the EP’s claims?

In general, the EP wants to renegotiate, not the total amount, but certain key political elements. However, some MEPs, such as the Belgian Philippe Lamberts (Greens/EFA), are mentioning that a renegotiation of the figures is not excluded.4 In its resolutions (23.10.12 and 13.03.13)5, the EP has been putting an emphasis on flexibility between budget lines, the revision clause and the reform of own resources system (genuine own resources and phasing out of all existing rebates as well as correction mechanisms), demands restated by the EP President Martin Schulz in the press conference after the vote in Plenary, on the 14.03.13:

“There must be maximum overall flexibility and an ambitious agreement on own resources. The European Parliament also demands a compulsory, legally binding and comprehensive revision of the multiannual financial framework decided by qualified majority in the Council.”6

The EP also wants a stronger emphasis on supporting competitiveness, and economic growth rather than a budget spent on ‘priorities of the past’, e.g. taking funds from the agriculture budget, putting them in science and innovation.” MEPs are also extremely worried about the payment shortfall in 2012 which is still not solved. Besides, they consider that the MFF, as it is outlined in the European Council’s deal, would increase the gap between commitments and payments appropriations which could possibly cause a deficit in the coming period.

What will happen if there is no consent?

It is clear that there is a patient opposition of MEPs against the European Council’s position and this will lead to further negotiations to finally adopt the regulation laying down the MFF.75 Sectorial specific acts, which are also part of the MFF legislative package, are also negotiated in parallel and must be voted under ordinary legislative procedure. Through lack of new MFF, these acts cannot be adopted either. If no agreement is reached by the end of 2013, the 2013 ceilings and other instruments could be extended to 2014, with a 2% inflation adjustment, until a new MFF is adopted. Regarding the resources, such a budget would involve larger spending than the current MFF, but a lower level of funding for certain headings, e.g. heading 1a, or new programmes such as the Connecting Europe Facility would not be covered, while there would be higher ceilings for the CAP and Cohesion Policy.

This would not be an ideal situation but it would not ultimately threaten the functioning of the EU. MEP Philippe Lamberts considers it might be preferable for democracy not to have a MFF and to wait until the 2014 elections where parties could stimulate a European-wide public debate on EU priorities.

Moreover, it is undeniable that agreeing on a long-term budget representing only 1% of EU GNI is not giving the EU the means to fulfill its ambitions. It remains to be seen how the EP will manage the informal negotiations and whether it will stand for its positions or clash completely with the European Council.

To learn more about how do the MFF negotiations work: http://www.consilium.europa.eu/special-reports/mff/2-tracks

1 Euractiv: http://www.euractiv.com/priorities/2014-2020-budget-figures-news-517725

2 Interview, 08.03.13: http://europarltv.europa.eu/en/player.aspx?pid=2f3445fb-12fe-4427-ad8e-a17a011b859d

3 European Parliament resolution on the European Council conclusions of 7/8 February concerning the Multiannual Financial Framework of 13 March 2013; http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+MOTION+B7-2013-0129+0+DOC+XML+V0//EN – 506 votes to 161, 23 abstentions.

4 Interview, 14.03.13, http://europarltv.europa.eu/en/

5 European Parliament resolution of 23 October 2012 in the interests of achieving a positive outcome of the MFF 2014-2020 approval procedure; http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2012-360

6 Press release: http://www.europarl.europa.eu/news/en/pressroom/content/20130312IPR06440/html/Long-term-EU-budget-negotiations-EP-sets-out-its-stance

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