The European Commission published a draft budget for the European Union in 2011 only on Tuesday (27 April), but already it is clear that the budget will be the subject of a bruising battle between the Council of Ministers and the European Parliament.
The budget is being put forward at a time of great strain on public finances across the European Union. So national governments – particularly those that are net contributors to the EU budget, receiving less back than they put in – are looking to rein in EU spending. In addition, the establishment of the EU’s diplomatic corps, the European External Action Service (EEAS), is a significant addition to the budget, whose financial needs have yet to be tested.
Those two elements of context would be enough to make the budget discussions difficult. The difficulties are being compounded because MEPs are anxious to test the greater powers over budgetary decisions that they have been given by the Lisbon treaty. They now have a say on the Common Agricultural Policy spending and the Common Fisheries Policy, which were previously out of bounds to them.
Reimer Böge, a German centre-right MEP and a veteran of the Parliament’s budgets committee, said that the Council should get ready for a battle on the budget.
“I come from the North Sea area, so we are used to stormy weather,” he said. “There is no bad weather, there are only wrong clothes.”
The Lisbon treaty has changed the dynamics of the budget negotiations, arguably making them more confrontational. The budgetary approval procedure has been streamlined, with what were previously two legislative readings reduced to one, meaning less time to submit and negotiate changes.
After the single reading, they are permitted two rounds of conciliation negotiations to get a deal before the end of the year. The two institutions are given only 21 days after the first reading to agree on a final budget. If a deal is not reached, the Commission is forced to present a new draft.
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No figures at all have yet been presented on what the EEAS would cost and are only expected in the autumn, following changes to this year’s EU budget line, said Janusz Lewandowski, the European commissioner for financial programming and budget.
Even before the 2011 budget negotiations get serious, the Council of Ministers and the European Parliament are already squabbling over revisions to the EU’s budget for 2010. Ambassadors from the member states discussed the budget revision yesterday (28 April) and they will have a meeting with MEPs within the next two weeks. The 2010 revision is turning into a dress rehearsal for the battles over the 2011 budget.
A revision of the annual budget during the course of a year is normal, but this time round the scale of revision is unusually large. Principally, that is because the European External Action Service (EEAS) is supposed to begin operating during 2010 and needs funding. In addition, the Parliament has chosen to revise its budget for administrative spending, proposing to add 150 posts and increase allowances for MEPs to employ assistants.
In doing so, the Parliament has ensured that there will be no money left over that might, for instance, be diverted to funding the EEAS or any other areas of EU activity.
The Parliament’s plan has not gone down well with some national governments. To add salt to the wound, the Parliament’s budgetary control committee has recommended delaying approval of the Council of Ministers’ spending in 2008.
In turn the Spanish government, which holds the presidency of the Council of Ministers, has warned that it would be ready to end a long-standing agreement that EU institutions should not criticise each other’s administrative expenditure.
MEPs are sceptical about assurances from member states and the Commission that the EEAS will be “budget-neutral”. They believe that highly paid management posts at the top of the service will add millions of euros to the EU’s foreign policy budget.
Many MEPs are livid that the Parliament is not getting a bigger say over how the EEAS is set up and are warning they will hold up its budget unless they get greater financial oversight over the service.
“I told my voters that under the Lisbon treaty things would be better, more clear and transparent, and now I discover the contrary is the case,” said Ingeborg Grässle, a German centre-right MEP. She is in charge of drafting the Parliament’s response to a proposal to reform the EU’s financial regulation to take account of the new diplomatic service.
Grässle is upset that attempts by the member states and the Commission to construct the EEAS outside the Commission will mean that they will not have full rights to review its spending.
She said: “We want to see the EEAS as an integral part of the Commission, similar to OLAF [the anti-fraud office].”
Discontent in Parliament over how the diplomatic service is being set up looks likely to colour the budget negotiations. The 2011 budget is unlikely to have an easy ride.