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Last updated: November 13, 2012 8:33 pm
The abrupt collapse of talks on the EU’s budget for 2013 has amplified concerns about the bloc’s ability to negotiate a seven-year €1tn budget, in what is set to be a fraught summit in Brussels next week.
With a midnight deadline to reach a deal, EU member states, members of the European parliament and the European Commission, the EU’s executive arm, had gathered on Tuesday to resolve differences over a €9bn backlog of unpaid bills.
But hours before the talks were to begin, Martin Schulz, parliamentary president, stunned the commission and a collection of ministers who had travelled to Brussels for the meeting when he informed them that MEPs would not attend.
Under EU law, the commission will have to draft a new budget – a process that could take weeks and distract from other business. But the larger concern was that the failure to resolve a relatively small dispute could undermine a much more consequential negotiation over the EU’s long-term budget, which will take centre stage next Thursday when European leaders will converge on Brussels for a special summit.
Some diplomats are already predicting the gathering will end in failure. The stand-off over the current-year budget rehearsed the same deeply entrenched positions that have featured in the larger negotiations, pitching the UK’s determination to curb spending against other governments – supported by parliament and the commission – that believe more EU funding is essential to revive the bloc’s economy.
Mr Schulz, speaking to reporters in the afternoon, warned that the parliament, which must approve the long-term budget, was “prepared to refuse a compromise” if the terms were not right.
As for the 2013 budget, he blamed member states for failing to give ground on the commission’s request for a supplementary budget to cover the €9bn in unpaid bills from 2012. A dispute over the same pile of bills led to the breakdown of talks last Friday, requiring the ministers to return to Brussels for Tuesday evening’s special session.
But Andreas Mavroyiannis, the Cypriot diplomat who presided over the meeting, later accused MEPs of taking the 2013 budget “as a hostage”. He added that he had worked to keep the two negotiations separate but acknowledged that Tuesday’s failure would darken the mood next week. “It augurs ill for the negotiations on the [long-term budget],” he said.
Greg Clark, the financial secretary to the UK Treasury, said it was “senseless that the only budget deal the European Parliament is interested in is one that massively increases EU spending – raiding Europe’s taxpayers”.
In a bizarre bit of EU theatre, Alain Lamassoure, the chairman of the parliament’s budget committee, turned up at the meeting – even after Mr Schulz’s declaration – in order to formally notify ministers that his group was not coming.
Tuesday’s breakdown was not the first strange turn in the discussions. On Friday, the talks collapsed after Janusz Lewandowski, the budget commissioner, surprised both member states and ministers over lunch when he acknowledged – apparently unbidden – that as much as €1.4bn of the €8.9bn in extra funds he had requested for 2012 might not be needed this year.
The UK, with support from Germany and France, blasted this as a stealth increase of more than 9 per cent to an annual budget that had already been agreed.
The stack of unpaid bills is partly a result of the EU’s peculiar seven-year budgeting practice, which typically results in bills being carried over to future years and then piling up near the end of the cycle.
The UK and others have ordered the commission to resolve the crisis by reprioritising other spending, but MEPs have blamed governments for authorising EU spending and then declining to pay the bill when it comes due.
For 2013, MEPs were seeking a 6.8 per cent increase for budget payments to €137.9bn – in line with a commission proposal – while member states offered a 2.79 per cent rise.
In spite of the acrimony, Mr Mavroyiannis said he believed the parties were “not that far apart”.
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