Brussels, 06/02/2013 (Agence Europe) - This Thursday 6 February, the European Council will, in the words of its President, Herman Van Rompuy, begin the “final” negotiations on the budget of the EU for the next seven years (2014-2020). The outcome of the summit is uncertain, because the conditions for agreement have not yet all been met. Debate are likely to be difficult between certain net contributor countries to the budget (such as Germany, the United Kingdom, Sweden, the Netherlands and Denmark), which are calling for extra cuts, and the others, which feel that expenditure on cohesion and agriculture policies has already been trimmed enough in the most recent compromise of November (see EUROPE 10737). The fact remains that many delegations take the view that a further breakdown on the forthcoming financial framework would augur extremely ill for Europe.
Van Rompuy stresses that negotiations on the budget “are always difficult, lengthy and can look messy from the outside, and sometimes even from the inside”. “It happens that we get so absorbed by small details during the negotiations that the bigger picture gets lost. We should not forget the bigger picture - because this is what really matters”, he added in a written statement.
According to the President of the European Council, the situation is as follows: 1) the budget should help to tackle the most urgent problems. Youth unemployment is currently the greatest challenge in Europe. This is why Van Rompuy is to propose a new initiative for youth employment with an envelope of “several billion euro”. This money will go to the worst-affected regions, in order to get young people back on the road to work; 2) the budget should be a driving force for growth and employment in the future. “This is why it is so important that we increase, in real terms, spending on research, innovation and education”, states Van Rompuy. He also feels that the growth and employment potential of all of EU policies, from cohesion to agriculture, should be developed as much as possible; 3) the budget should be one of moderation to reflect the efforts to cut back already made by the member states. “This is why - for the first time ever - there will be a real terms cut, compared to the current budget cut back”, warns Van Rompuy. His November proposal already represented a 2% cut compared to the current financial framework 2007-2013, or €20 billion less. The November text provided for a cut of around €80 billion from the initial proposal of the European Commission (see EUROPE 10766 and 10737). Van Rompuy had proposed total budget of €972 billion, or 1.01% of the gross national income of the EU.
France-Germany bilateral. Late on Wednesday afternoon, French President François Hollande met German Chancellor Angela Merkel to discuss the EU budget, a few hours before the friendly football match between the two countries. According to a number of sources, there will be no Franco-German document before the start of the European Council outlining a compromise. The French president told the European Parliament on Tuesday that France wanted a European budget which would allow the Community policies to do their jobs (see EUROPE 10779). “France is not ruling out additional cuts, but we must not go too far, otherwise the European policies will no longer work and the EP will reject it”, a diplomatic source explained. The German chancellor stresses that the “spirit of compromise” must guide the debates, but that the budget should focus on growth.
A number of countries - particularly the United Kingdom, but also Sweden, the Netherlands, Finland and Denmark - are calling for more budget cuts. British Prime Minister David Cameron wants a further €30 billion off the budget. It is believed that Germany is prepared to move in this direction in order to facilitate agreement. The United Kingdom does not wish to see a reduction in its budgetary rebate, whilst France and Italy, amongst others, are calling for this rebate to be reviewed. Readers may recall that the November text provided for the British rebate to be kept in place.
Certain countries, such as France and Spain, feel that the common agriculture policy has already given a lot. The so-called cohesion countries warn that they will not accept any additional reduction in the structural funds. France takes the view that the intermediate regions came out very poorly from the November compromise. Italy wanted improvements, particularly on cohesion and the “revenue” plank of the budget.
In order to reach an agreement at the Summit, “all of the leaders need to be prepared to make choices and concessions”, said Van Rompuy. If there is an agreement at the European Council, we will then have to “reach a final agreement with the European Parliament”. “Once again, we will all have to be ready to make concessions. This is how Europe works”, Van Rompuy pointed out.
Organisation of the discussions. In his letter of invitation to the EU leaders, Van Rompuy said that he was confident that, with “some adaptations”, the proposal he made on 22 November “can constitute the basis for a deal in the European Council”. After the traditional meeting with the President of the European Parliament at 3.00pm on Thursday, Van Rompuy will explain to the heads of state and government at the first working session what adjustments he believes are necessary for a good compromise to be made. He would like the discussions to focus firstly on the overall amount of expenditure and on the revenue side, so as to reach a common understanding on the overall framework. At the same time, the member states' experts will be briefed at around 3.00pm by Van Rompuy's Head of Cabinet on the more technical details of the compromise text. The European Council will continue its discussions on the budget over dinner, which will start early, at 6.30pm. (LC/transl.fl)