Europe’s leaders are in Brussels for the first day of the meeting to set the EU budget for 2014 – 2020, and it looks like reaching an agreement is going to be very difficult. Today, (November 22 ) the heads of national governments are meeting European Commission and European Council presidents José Manuel Barroso and Herman Van Rompuy individually in an attempt to smooth the way to agreement. It’s a big deal, EUR 1 trillion in funding is on the table and the rhetoric of the last few days suggests that many of Europe’s leaders are not coming to the meeting in a giving mood. However, EU officials are warning that cuts could kill growth, if the resources currently provided to projects across the Union dry up. They say the EU must have a strong and flexible budget.
Two proposals have been put forward so far: The European Commission’s is for EUR 1.033 trillion, while the latest budget plan from Herman Van Rompuy is for EUR 80 billion less, taking the total for the 2014 – 2020 period down to below the trillion euros mark. Both proposals have already been rejected by some EU leaders – British PM David Cameron told the UK parliament that he will not agree to cutting country’s rebate, worth billions of euros returned each year to the UK, or increasing the EU budget. “It would be quite wrong – it is quite wrong – for there to be proposals for this increased extra spending in the EU,” said PM Cameron.
Meanwhile, the French president Francois Hollande said that he could not agree to cuts to the Common Agricultural Policy, which provides support to French farmers, in Herman Van Rompuy latest budget proposal. The French media is already speculating about another British veto and another EU agreement sunk by David Cameron. Spain’s leader Mariano Rajoy has also said he opposes the “radical” cuts to the Common Agricultural Policy, which also benefits Spain, outlined in Van Rompuy’s proposal, indicating that he prefers the European Commission’s budget plan. However, Rajoy said he will approach the negotiations in a “constructive spirit.”
Germany’s Chancellor Angela Merkel raised the prospect of failure yesterday, in which case another meeting to set the budget would be necessary early next year. She also warned Britain against making itself the scapegoat if the talks fail, saying that other EU countries could use David Cameron’s position as an excuse to block a deal for their own national interests.
Romania and other countries set to benefit directly via funding from an increase in EU budget are unsurprisingly keener on the Commission’s proposal. Romania’s president Traian Basescu, who will represent the country at the meeting, said the negotiations will be difficult and conceded the possibility of the talks failing, but he remained optimistic, saying he had seen a widespread wish to reach an understanding.
Members of the European Commission and the European Parliament are in general far more keen to see an increased budget. The Commission’s president Barroso said, “Some people say ‘let’s cut!’ and then pretend it does not make any difference. But a little difference in the EU budget makes a massive difference for the people depending on EU programmes.” He argues for the need to spend to promote sustainable growth across the Union, giving an example of the Horizon 2020 program – each EUR 1 billion cut from the scheme would result in 4,000 SMEs across Europe losing funding. The head of European People’s Party group said that with a budget below 1 percent of the EU’s GNI (gross national income) “we cannot continue the current policies.” Overall voices from Commission and the European Parliament give the availability of sufficient funds as vital to strengthen EU’s economy and labor markets.
Liam Lever, email@example.com
(photo source: European Council)