MEPs start to unravel budget deal

By David Cronin

Date: 12/01/06

The European Parliament will next week reject the proposed 862 billion euro multi-annual budget, arguing that it would not allow the Union to face up to its main challenges.

The assembly's session in Strasbourg (16-19 January) is to pass a resolution criticising the deal reached by EU leaders at their mid-December summit.

The motion contends that heads of state and government at the European Council were more eager to fight for their national interests than to "foster the European dimension".

Reimer Böge, the German Christian Democrat MEP tasked with formulating the Parliament's response to that deal, said: "The decision of the Council was more based on national interests and Christmas gifts than in bringing an added-value for Europe. We have to take care of this, if the Council does not."

According to the motion, the December accord would not "guarantee an EU budget enhancing prosperity, solidarity and security" or give the Parliament a say in its review.

Under the deal, the vast bulk of the EU's budget would still be allocated to agriculture and regional aid, amounting to more than two-thirds of expenditure in 2007-13. By contrast, just over 1% would be spent on measures in the justice, home affairs and citizenship category, 6% on foreign aid and 8% on "competitiveness for growth and employment".

Diplomats are warning that the Austrian presidency's room for manoeuvre in negotiations with Parliament is very limited, since it was very difficult to reach an agreement among the member states.

But one official close to the negotiations said that the Austrian presidency "would have to move on the final deal and they know it". The official said Parliament was expected to win concessions on three main areas. First, the 'flexibility reserve', which makes extra funds available to deal with unforeseen events such as natural disasters and foreign policy emergencies, could be increased from the 200 million euro provided for by the December deal closer to the 500m euro demanded by Parliament. Second, Parliament is likely to obtain higher spending for education and training. "Programmes such as Socrates or life-long training have suffered tremendously under the December deal and the Austrian presidency will have to offer Parliament some concessions on this," he said. A third possible area where the Parliament might obtain limited success was competitiveness - where spending for transport or aid to small- and medium-sized businesses was also cut drastically.

"Parliament could obtain 3-4 billion euro maximum, this is approximately what it obtained during the negotiations on the last financial perspectives, on the Berlin agreement, in 1999," the official added.

Böge said that he hoped a common stance could be reached in negotiations between MEPs and Austria's EU presidency. These talks should be concluded within three months so that they could be put to a vote at the assembly's plenary session in May, he said.

A spokesman for Austria's representation in Brussels said that if a deal could be thrashed out with MEPs during the first half of the year there should still be time to implement decisions on the Union's regional aid in a way that would satisfy the Union's ten new member states. "The Austrian presidency is very aware that there have to be negotiations with Parliament and [is] very willing and happy to enter into them," the spokesman said.

The European Commission is scheduled to present a 'working document' on implementing the December accord on 1 February.

Dalia Grybauskaite, the commissioner in charge of the budget, said that while it was good that the December summit reached an agreement, "the deal was not optimal, since the budget was not yet reformed enough".

Article anticipates the vote at the European Parliament in its session on 16-19 January 2006, on the proposed 862 billion euro multi-annual EU budget for 2007-2013. It was expected that MEPs were to pass a resolution criticising the deal reached by EU leaders at their mid-December summit and rejecting the proposal.

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