Brussels, 09/11/2011 (Agence Europe) - Negotiations on the adoption of the 2012 budget are entering their final phase and the most difficult subjects will be the level of payment appropriations and requirements in the “competitiveness” (section 1a) and “external action” (section 4) sections for which the European Parliament will propose going above the ceilings set out in the financial framework. In the context of the current crisis, the three EU institutions have made a commitment to reaching an agreement in the timeframe contained in the treaty and regulations. This will effectively mean during the second part of the conciliation day, 18 November at the latest (the end of conciliation ends on 21 November). A trialogue will take place on Monday 14 November and an initial conciliation meeting was held on Tuesday 8 November.
The European Parliament is highlighting the need to avoid mixing up negotiations on the 2012 budget with those on funding additional spending for the ITER nuclear fusion research project. On Monday 7 November, the chair of the EP budgets committee, Alain Lamassoure, said “we are not against re-examining the problem of further ITER costs” (€1.3 billion over the 2012-2013 period) on the condition that the proposal is “different” from the most recent Commission proposal accepted by the Council. The EP is not agreeing to it because it demands greater redeployment than in the past, explained Lamassoure, who added that “the EP did not agree last year and it is less likely to agree this year as long as events in the nuclear field continue to promote very real public concerns”. The Council agreed to fund further ITER costs in the following way: €660 million (in payment appropriations) in 2012-2013 through the redeployment of funding and €640 million (2012-2013) through the revision of the multiannual financial framework. The Council is counting on €200 million in redeployments for 2012.
Flexibility instrument. The sections that will create the most problems in the negotiations between the Council and the EP are section 1a (cohesion) and section 4 (external action), for which the EP is requesting use of the flexibility instrument in order to go beyond the ceiling set out in the financial framework (from €31 million for 1a and €209 million for section 4). The Council is opposing this.
The EP is proposing an increase in funding for research and innovation projects (section 1a), as well as for Palestine and instruments for funding development cooperation in Asia and Latin America (section 4). The EP is suggesting reducing funding for the common foreign and security policy (CFSP), to which the Council does not agree.
Payment appropriations. The EP will give its “last-minute” agreement on the level of payment appropriations, which is the Council of Ministers of the EU's major concern. The latter is counting on an increase of 2.02% in payment appropriations from the 2004 budget, in comparison to the 2011 budget. During the conciliation meeting on Tuesday, the Polish Presidency of the Council explained that if too high a level is set out for payment appropriations, it will be necessary to “freeze” money for the Community budget, which ultimately has not been spent. This compels member states to borrow more on the financial markets. The Council considers that it is preferable that the lowest level possible is decided and that they see whether the EU needs more money during the year.
The EP has said that it does have arguments in favour of supporting Commission requests (a 4.9% increase in payment appropriations for 2012), such as consumption credit rates for 2011, particularly in the context of structural funds. Nonetheless, new factors (forecasts of falling inflation) are preventing the EP from requesting a significant increase in payment appropriations.
Administrative spending. Inflation in 2011 was higher than forecast in the draft budget for 2012. Automatic indexing of salaries for European institution civil servants is therefore expected to lead to higher rise than expected (in the draft 2012 budget). Additional information is expected so that elements that do have an impact on section 5 can be taken into account in the 2012 budget.
For all other remaining issues, other budgetary elements in this section are not expected to create any problem. The Council could prove more amenable to efforts made by the EU to reduce its demands for funding in 2012.
During his opening of the conciliation meeting, the president of the Parliament, Jerzy Buzek, referred to clear and targeted budgetary choices. He also said that “the core priority behind Parliament's choices is the ambition to promote growth and investment in the EU, and thus to contribute to Europe's faster recovery from the crisis. […] There are obviously still core points that need to be settled. With goodwill on both sides, I am sure we can find an acceptable compromise some half way between our respective positions.” (LC/transl.fl)