Brussels, 24/11/2010 (Agence Europe) - At the meeting of COREPER (the Committee of Member States' Permanent Representatives to the EU) on Thursday 25 November 2010, the Belgian presidency of the EU Council of Ministers hoped that the EU delegations would unanimously agree to keep the budget flexibility mechanism in the multiannual financial framework. Discussions with a view to such an agreement were held on Wednesday.
The mechanism provides a way of dealing with additional funding requirements of up to 0.03% of the EU27's gross national income (GNI), currently €3.4 billion. Such a move would delight the president of the European Commission, José Manuel Barroso, who said in an address to MEPs in Strasbourg on Tuesday 23 November that he strongly hoped to receive positive news from the Council on keeping the flexibility mechanism to meet the political conditions for ensuring success in adopting the EU's budget for 2011 (see EUROPE 10262).
The conciliation process between the Council and Parliament over the 2011 budget broke down because of disagreement over the flexibility mechanism and the absence of political statements demanded by the European Parliament on new EU funding sources and how the EP will be associated with the upcoming talks on the next financial framework. The EP delegation asked the Council to keep the budget flexibility mechanism in place, but the Council would only say that it was prepared to discuss the matter. Agreement on this issue at COREPER would remove one of the stumbling blocks.
Budget flexibility is one of the measures in the “Lisbon Treaty package” and would be added to Articles 2 and 11a of the new regulation setting out the multiannual financial framework and in a new paragraph to a new inter-institutional agreement between the European Parliament, the Council of Ministers and the European Commission on cooperation in budget matters.
The new flexibility mechanism is known as a “contingency margin” and would be triggered following a qualified majority decision by the Council. Unlike the current set-up, it would not be possible to overshoot the upper limits set out in the financial perspectives. The contingency margin would use cash available within the headings of the EU budget.
The contingency margin is not the same as the “flexibility instrument” which has an upper annual limit of €200 million for funding expenditure that cannot be funded from amounts available under one or more of the other headings of the EU's budget. (L.C. trans fl)