EU budget deal struck with Parliament negotiators

José Manuel Barroso, President of the European Commission (second from left), received Martin Schulz President of the European Parliament (in the middle), Enda Kenny, Irish Prime Minister and President in office of the Council of the EU (second from right), and Eamon Gilmore, Irish Deputy Prime Minister and Minister for Foreign Affairs and Trade (first from left) and Alain Lamassoure, Member of the EP (first from right) . They gathered for a discussion on the Multi-Annual Financial Framework (MFF) 2014-2020 and on an amending budget for 2013. (EC Audiovisual Services 06/05/2013).

José Manuel Barroso, President of the European Commission (second from left), received Martin Schulz President of the European Parliament (in the middle), Enda Kenny, Irish Prime Minister and President in office of the Council of the EU (second from right), and Eamon Gilmore, Irish Deputy Prime Minister and Minister for Foreign Affairs and Trade (first from left) and Alain Lamassoure, Member of the EP (first from right) . They gathered for a discussion on the Multi-Annual Financial Framework (MFF) 2014-2020 and on an amending budget for 2013. (EC Audiovisual Services 06/05/2013).

Negotiations for the European Union proper budgets for the 2014-2020 period between European parliament representatives, the Irish Presidency and the European Commission have been concluded. This is the so-called Multiannual Financial Framework 2014-2020, setting the ceiling for EU spending.

The agreement will now be submitted to both the Council and the European Parliament for final approval. It must be reminded that the European Council of the 27 leaders in February agreed an overall €960 billion spending backstop for the next seven years. This proposal was rejected by the Parliament. After that tensed negotiations started between the Irish Presidency, the Parliament and the Commission aiming at the conclusion of a deal before the summer holidays.

Late night agreement

In the late hours of Wednesday night, Janusz Lewandowski, Commissioner for Financial Programming and Budget said, “After many hours of intense negotiations on 18 and 19 June 2013, the Irish Presidency, the European parliament’s negotiators and the European Commission have concluded the negotiations on the 2014-2020 financial period”.

The Parliament negotiators manage to include in the deal strong flexibility measures to make the fullest use of the amounts available to the EU budgets over the next years. They comprise also a binding revision clause in 2016, in parallel with a review of own resources (the funding of the EU budget). In reality the Parliament after conceding to accept the overall ceiling of €960 billion for 2014-2020 EU spending, had demanded that not one euro of the seven-year budget remains unused and asked for complete flexibility in internal transfers of unused funds.

It must be mentioned here that a large part of the EU budget is financed by own resources of the European Union, on top of member state contributions. Currently a small part of the VAT collected in the 27 member states goes directly to the EU coffers. In view of possible changes in the own EU resources during the next seven years – hopefully an increase – the Parliament managed last night to include in the final deal this biding budget revision close.

The Parliament had also insisted that the time horizon of the next seven years is too long given the fast changing circumstances in our brave new world. To this effect the Parliament negotiator asked for a deep re-examination of the budget in 2016 and yesterday the deal also included a binding revision of the entire EU spending in relation to possible changes in own EU resources.

Solidarity

With the idea of solidarity between member states having gained momentum over the past months, budget funds devoted to this purpose will be greatly increased. Obviously employment supporting spending will be also increased by bringing the bulk of the totally available funds in the early years of the 2014-2020 period. Everybody agrees that employment enhancing measures are needed today, not tomorrow. According to Lewandowski “the Solidarity Fund would be enhanced to make it more responsive to natural disasters such as floods, and the new Youth Employment Initiative would see strong funding in 2014 and 2015 as the situation calls for immediate measures”.

In total the package includes: Flexibility to allow more efficient use of EU money, a review of the seven-year budget before the end of 2016 and a method for carrying forward discussions on EU own resources. The package was agreed after two days of intense negotiation during the last two days. There have been ten meetings, within the last 24 hours of negotiations.

The work load of those negotiations was carried by the Irish Presidency. After the agreement was reached, the Irish Minister for Foreign Affairs and Trade, Eamon Gilmore TD, who conducted the negotiations on behalf of the EU member state governments stated: “We have concluded negotiations on the EU’s multi annual budget for the next seven years. I have reached an agreement with the European Parliament’s chief negotiator. We have agreed a package that we are both going to recommend to our respective institutions. I will present this agreement to member states next Tuesday”.

According to the same source the package addresses all four of the issues identified by the European Parliament as important for the EU budget.

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