EU Budgets: Europe hoping for Xmas gifts

Lithuanian President Dalia Grybauskaitė, whose country currently holds the rotating Presidency of the European Union’s Council, met with the Chairman of the European Parliament’s Committee on Budgets, Alain Lamassoure in Vilnius. (Lithuanian Presidency’s photographic Library, 19/9/2013)

The Lithuanian Presidency of the European Union’s Council is now under pressure over the approval of EU’s 2014-2020 budget regulation, referred to as the EU’s Multi-annual Financial Framework (MFF), planned to support EU’s expenses for the next seven years amounting to €1 trillion. The problem is however that the approval of the first EU budget for 2014 under this framework is now stuck between the Parliament and the member states (Council).

In this respect during the Budgets Committee meeting of the Parliament on Monday 9 September the Commission and the legislative joined forces in repelling the Council’s position for a severely cut EU budget for next year, as presented to them by a Lithuanian vice-minister. As if this was not enough to block the budget approval procedure, the three major parties of the Parliament joined forces and intervened aggressively in the confrontation.

United against the Council

The meaning of a statement issued jointly on Tuesday 10 September by the three major parliamentary groups EPP, S&D and ALDE was adamant clear. It roughly said that, “when the full Parliament will give the MFF its final blessing remains to be seen, as the conditions set out in its resolution of 3 July are still not met”. It goes without saying that the legislators will continue holding back their approval of the MFF 2014-2020 until an agreement is reached also on the 2014 budget. In short the Parliament’s position for both the 2014 budget and the MFF 2014-2020 framework will be discussed and voted almost simultaneously.

This unification of two seemingly independent procedures in the Parliament has a hidden content. The Parliamentarians fear that the Council aims at financing the coverage of a good part of the Union’s 2012 and 2013 unpaid bills with 2014 funds and not by an independent addendum to the 2013 budget, as they wished and it was agreed in July. Those bills amount to €11.2 billion. Member states’ economy and finance ministers (ECOFIN) took a formal decision to cover only €7.3 billion of the above amount and said they will decide in autumn on a second tranche of €3.9bn to cover the rest. This last ECOFIN decision is still pending.

€3.9bn away

As things turn out, this has become a key issue for the Parliament as legislators want to make sure that the 2014 budget – the first under the new MFF – is not eroded by old unpaid bills. It’s now evident that the Parliament will not give its final consent for the MFF 1014-2020 Regulation or adopt the 2014 Budget until the entire €11.2bn gap is fully covered by the Council. Consequently the EU budget will remain in the air until those unpaid bills are settled.

In view of this stalemate the Lithuanian Presidency organised a meeting between President Dalia Grybauskaitė with the Chairman of the European Parliament’s Committee on Budgets, Alain Lamassoure. According to a Press release issued afterwards, “the meeting focused on the issues relating to the European Union (EU) multiannual financial framework for 2014-2020 and to the next year’s budget. Among the other topics of discussion was the EP’s important role in adopting legislation necessary for implementing the budget”.

Stating the obvious is a standard method of press release writing, when there is nothing to tell. Understandably Lamassoure, even if he wanted, that presumably he didn’t, he could not change the Parliament’s positions over this crucial matter since the whole affair has surpassed the Budget Committee. It is now in the hands of the presidents of the three major political formations representing the overwhelming majority of parliamentarians. As the Sting has already predicted, the issue will be resolved by the 28 EU leaders during their last European Council meeting of the year, hopefully to be held in mid December under the Xmas Spirit of generosity. The EU budget is the best way for the affluent to show their solidarity to those in need.