Brussels, 09/11/2012 (Agence Europe) - EU member states are split over the call for a €9 billion extension to payment appropriations for the EU's 2012 budget, and on Friday 9 November in Brussels they failed to negotiate a compromise with the European Parliament on the EU's budget for 2013. The Parliament closed the door on the talks because the Council refused to allow supplementary payment appropriations. Agreement on the 2013 budget was nonetheless imperative by Tuesday, explained Cypriot European affairs minister Andreas Mavroyiannis. He said that failure to agree could poison the talks on the upcoming multiannual financial framework (MFF) for 2014-2010 among heads of state at the European Council on Thursday 22 and Friday 23 November. Italy said that in any case the general context meant that it was not possible to postpone the decisions on the 2012 and 2013 budgets, and a good agreement would have been very helpful for the talks on the MFF for 2014-2020.
In order to reach agreement on the budget for 2013, European nations ought to have first agreed on the problem of extra funding requested by the European Commission to cover the payment appropriations shortfall in the 2012 budget. The €9 billion extra requested in the draft amending budget 6/2012 is viewed as too much by the net contributors (Germany, the United Kingdom, Austria, the Netherlands, France, Denmark, Sweden and Finland) (see EUROPE 10720). These countries want unused expenditure shifted from elsewhere in the budget to avoid having to find new cash. Denmark and the UK (which has announced that it is making a 20% cut in its public spending) say that if this €9 billion extension is approved for 2012, this would make the 2012 budget 9.5% higher than the 2011 budget, which they say is unacceptable.
On the other hand, countries like Italy, Poland, Portugal, Greece, Belgium, Hungary, Lithuania, Latvia and Ireland back the extension needed to pay bills and honour commitments. They also back a statement issued by the three EU institutions at the end of 2011 on the need for an amending budget if payment appropriations were to run out, as has now happened.
The European Commission says there is little in the way of redeployment options. It says the €9 billion comes from requests for funding from the member states as follows: €625.3 million for several programmes under Heading 1a (Seventh Framework Research Programme and Erasmus); €7.17 billion for the Cohesion Policy; €1.17 billion for rural development programmes (€1.04 billion) and completion of farm programmes for 2000-2006 (€111 million) and programmes to monitor and eradicate animal diseases (€17 million); €10 million for the European Returns Fund; €67.1 million for foreign action.
France says that Erasmus has to have the wherewithal to function properly but, given the sheer size of the amount requested, it wants things that have to receive funding in 2012 to be covered by redeploying funding from elsewhere. On Thursday, a hundred or so leading lights in Europe, including French philosopher Michel Serres and Spanish film-maker Pedro Almodovar, sent an open letter to Europe's leaders in defence of Erasmus.
Hungary has pointed out the danger of companies going bust if their invoices are not paid and countries missing their budget targets if they have to pay out because the EU funding has not been forthcoming. The chair of the Parliament's Budgets Committee, Alain Lamassoure (EPP, France), slammed ministers “obsession” with making cuts and pointed out that the extra money was to reimburse funding made by the member states themselves!
For the 2013 budget, the Council is sticking to its position at the start of the talks in July, namely a rise of 2.79% in payment appropriations compared with 2012 (to €132.70 billion)) and a rise of 1.27% for commitment appropriations (to €149,78 billion). Most countries say this is needed to match the budget consolidation efforts being made nationally. Germany says it is simply not possible to agree to a rise of any more than 2.8% and rejects the Parliament's request for the flexibility instrument to be used to find €50 billion for Heading 1a (Competitiveness). Using the flexibility instrument in this way would lead to an increase beyond the total cap on the current MFF.
Italian earthquakes. The Council of Ministers and European Parliament are expected to approve draft amending budget 5/2012 to provide €670.19 million in commitment and payment appropriations from the Solidarity Fund in financial aid to Italy to cover earthquake damage in Emilia Romagna. The Commission has suggested that the money be found by increasing the overall cap on payment and commitment appropriations for the 2012 budget. The Parliament's Budgets Committee has gone along with the request. At the Council of Ministers, Italy, Portugal and Spain asked for this request to be dealt with separately from the 2013 budget and the draft amending budget 6/2012 as a sign of solidarity from the EU institutions with the earthquake victims, but some net contributors disagree and want the three packages covered in a single budget agreement. (LC/transl.fl)