The battle for the 2016 EU Budget to shake the Union; Commission and Parliament vs. Germany

Kristalina Georgieva Vice-President of the European Commission in charge of Budget and Human Resources on the left and Valdis Dombrovskis, Vice-Presidents of the EC, walking to take his position in the rostrum delivered a joint press conference on the conclusions of the weekly meeting of the Juncker Commission, which had focused on the EU Budget for 2016. (EC Audiovisual Services, 27/05/2015, Brussels – European Commission/Berlaymont).

Last Tuesday the European Parliament showed its teeth by angrily rejecting the cuts proposed by the Council to the EU budget for next year. The Commission also stated its concern at the Council’s budget cuts. Even though the Commission doesn’t participate directly in the negotiations between the Parliament and the Council, it acts as a catalyst in achieving a deal.

From their side, the 28 EU member states making up the European Council agreed between them that the EU Budget as proposed by the Commission is too lucrative and has to be generously slashed down. To this effect, on 4 September 2015, the Council adopted its position on the draft 2016 EU budget as proposed by the Commission. It confirmed the political agreement reached by the Permanent Representatives Committee in July, under which the 2016 Budget has to be reduced on two accounts; commitments and payments.

What did the Commission propose?

Traditionally and according to the Treaty, the next Budget of the EU is agreed and voted for in the Parliament before the end of every year. The procedure is initiated by the executive arm of the Union. The Commission is responsible for drafting and proposing the Budget to the other two bodies, while the final version of it is negotiated between the Parliament and the Council.

There is a standard negotiation procedure. The Parliament states its position on the Council’s proposal before the 21-day Parliament-Council conciliation talks period, which starts towards the end of October, so as to agree a final budget version for the next year before the end of this year. This year the conciliation period stars on Thursday 29 October.

Who negotiates with whom?

To be reminded that the three decision making bodies of the European Union, the Parliament, the Commission and the Council, in November 2013 after a long row reached an agreement for the 2014-2020 financial framework, which sets limits on EU’s spending for the current seven year period. Despite the fact that the Commission’s proposal for the 2016 Budget was within those limits, the Council was led to reject it and proposed large cuts. It demands cuts of €563.6 million to funds for new projects (commitments) and of €1.4 billion to funds for paying incoming bills in 2016.

According to the Parliament, those cuts “reduce funding for migration, jeopardise research and undermine the EU’s role in the world”. For one thing the MEPs are reproaching here the EU governments, before the tribune of the public opinion, of being double faced in dealing with the migration crisis. Under the present circumstances, with the chaotic scenes and the deadly incidents in the migrant sea and land ’trails’, this accusation must have badly hurt those EU members which lead the Budget cuts strategy in the Council. Germany must be the leading power in this field.

Germany demands everything

From last July the Commission sided with the Parliament. To be noted that the proposal that the Council has slashed down was the Commission’s own. So it seems that Jean-Claude Juncker the Commission President together with the Parliamentarians will be leading the confrontation against the Council. Germany is the mastermind there concerning public spending reductions and the budget cuts. It’s not only that though. Only some weeks ago, Wolfgang Schäuble, the German minister of Finance, stated that the mandate and the powers of the European Commission should be trimmed down.

He said that in relation to the Commission’s willingness to allow certain countries, France and Italy included, to run larger than the permitted national budget deficits, exceeding the 3% of the GDP limit. Schäuble went even further and proposed that the checks and controls over the national budgets of the EU member states should be bestowed to a private auditing firm and the Commission be deprived of this competence. This was tantamount of questioning the entire EU edifice and briefly rewriting the EU Treaty.

Can Berlin beat Brussels?

The next battle around the EU Budget for 2016 may very probably acquire much larger dimensions, than the cuts of €563.6 million in commitments and €1.4bn in payments the Council proposed. The Parliament, firmly backed by the Commission, would most probably not accept the slightest cut of the Commission’s proposal for €153.5bn in appropriations and payments of €143.5bn for 2016.

Undoubtedly, the battle for the 2016 EU Budget has just started and may ‘outshine’ the historic conflict of 2013 for extra budgetary payments of €11.5bn. At that time, the Parliament had blocked the 2014 Budget and the 2014-2020 EU multiannual framework for months, until January 2014 – the day the Council accepted to pay the billions owed to member states, regions, local governments, research communities, non-governmental organizations and other beneficiaries of EU structural funds.