Last February’s agreement on the EU's 2014-2020 budget reached by the EU leaders was a victory for David Cameron. Due to David Cameron determination the EU leaders agreed to a multiannual financial framework that reduces EU expenditure for the first time in the EU’s history. However, the political agreement reached by all the EU member has to be translated into a Council Regulation and requires the consent of the European Parliament. The MEPs have therefore a stronger negotiating position as they can use their right of rejection to negotiate compromises with the Council and to obtain concessions from the EU’s Member States. In fact, the MEPs rejected the long-term budget for 2014-2020, as agreed by EU leaders, and stressed that cannot accept it “without the fulfilment of certain essential conditions;” The European Parliament is particularly determinate to resolve the issue of unpaid bills from last year’s budget.
The European Parliament, recalling a declaration annexed to the EU Budget 2013, which calls upon the Commission to present a draft amending budget to cover all unpaid payment claims for 2012, stressed “that it will not start negotiations on the MFF until the Commission comes forward with an Amending Budget corresponding to this political commitment, and will not conclude these negotiations before the final adoption by Council and Parliament of this Amending Budget”. Obviously, this entails an increase in national contributions, and consequently, member states have not taken it lightly.
The Commission has replied very quickly to the European Parliament’s demands as it believes its draft-amending budget will facilitate negotiations between the member states and the MEPs on the EU's next multi-annual budget for 2014-20, so that a deal can be reached as soon as possible. The Commission has requested €11.2 billion in extra funding from the member states “to reimburse beneficiaries of EU funded programmes completed across Europe in 2012 as well as to honour the Cohesion Policy claims that will fall due in 2013.” As Marta Andreasen, MEP said, "What is the point of EU budget summits if the commission, aided and abetted by parliament, can drive a coach and horses through the agreements and ask for more money whenever they feel like it?”
It is important to recall that because of QMV, the UK Government has not succeeded in ensuring deep cuts to the EU’s 2013 budget. The Government voted against the 2013’s budget of €150.90 billion in commitment appropriations and €132.84 billion in payments appropriations, which represents an increase of 2.9%, compared to the EU budget for 2012, but it could not reach a blocking minority. If the above-mentioned draft-amending budget is adopted this would lead to a substantial increase on the level of payment appropriations for 2013, which will go from €132.8 billion (£112.3 billion) to €144.4 billion (£122.1 billion). Hence, the UK would be required to an additional €1.2 billion.
The Financial Secretary to the Treasury, Greg Clark, described the Commission request as "totally unacceptable”, particularly “at a time when most Member States are taking difficult decisions to reduce public spending;” The Government does not support and will vote against any request for additional payment appropriations for the EU Budget. However, it is important to note that both the European Parliament and the Council must approve the draft-amending budget. Moreover, the UK would be unable to veto it, as the request for extra funds can be approved if a qualified majority of member states supports it. The UK can be therefore outvoted.
The Government has been working with other like-minded Member State, particularly with Holland, to restrain the EU Budget. Jeroen Dijsselbloem, the Dutch finance minister and chairman of the Eurogroup, according to the Euobsever, accused the European Commission of making "…no effort whatsoever to find the space (for savings) elsewhere in the budget."
On 6 May, the European Commission, the European Parliament and the Council of Ministers, represented by the Irish presidency, reached a compromise deal on the draft amending budget for 2013, whereby the €11.2 billion proposed by the Commission would be paid in two tranches, €7.3 billion to be paid now then €3.9 billion in the autumn. Coreper initially rejected such compromise deal, as member states have been against the idea of contributing with more money into the 2013 budget. Several EU’s member States, the UK, Holland, Germany, France, Sweden, Denmark and Finland as described the Commission’s request as excessive and could not endorse an additional contribution of €7.3 billion as a first tranche. There was therefore a blocking minority against the amending budget.
George Osborne, said “We are being asked to support a substantial increase in a budget that we have already agreed and I do not think that is acceptable and it flows from poor financial management. I will be voting against this budget proposal, I know that Britain is not alone in this.”
However, it is important to recall that the European Parliament has made clear that it won't accept any proposal from the Member States on the multi-annual financial framework for 2014-20, in fact, it won’t even enter into negotiations, until the existing funding gaps for 2012 and 2013 are covered. The European Parliament has threaten to freeze all negotiations on the 2014-2020 budget if the member states fail to endorse compromise deal on the draft amending budget for 2013. In fact, the MEPs are likely to reject the MFF, as agreed by all Member States, if there are no guarantees that the total amount of €11.2 billion will be paid by the member states. Whereas the UK as well as Holland stick to their guns and will vote against the compromise deal on the draft amending budget, Germany has yielded to the European Parliament pressure, and, in order to ensure that negotiations with MEPs on the MFF will continue, it has endorsed the €7.3 billion in additional funding for 2013 budget. Consequently, the blocking minority has been lost. The UK, the Netherlands, Sweden, Denmark and Finland cannot block the approval of additional contributions to the EU’s 2013 budget.
Hence, on 14 May, the Council reached a political agreement on draft amending budget for 2013. The EU finance ministers agreed to provide €7.3 billion as a first installment. The Council said in a statement that it "is not in a position to agree to the full level of payment appropriations requested by the Commission in draft amending budget 2/2013 at this stage” but it has confirmed “its willingness to take all necessary additional steps to ensure that the EU's obligations are honoured in a second phase, when the Commission will have more information on implementation, the possibilities for redeployment and on budget revenues.” The Council is therefore likely to agreed to provide the remaining €3.9 billion.
The UK, which described the request for additional funding as “unacceptable” and voted against it, would be required to contribute with more money for this year budget.
The Council stressing “the political nature of the agreement”, declared “that a formal vote on the Council's position on draft amending budget 2/2013 will take place at a later stage in parallel with the conclusion of the negotiations on the multiannual financial framework”. Although the European Parliament has described the political agreement reached by the Council as “a positive step forward”, it is still demanding “a formal, binding decision by the Council on the full amount of €11.2 billion before concluding the MFF negotiations.” The MEPs reiterated, "the European Parliament will not conclude these negotiations before the final adoption by the Council and the Parliament of this amending budget".
The Member States have had to return to the negotiating table in order to find a compromise with the European Parliament over the EU’s long-term budget. It remains to be seen what will come out of the negotiations. The European Parliament is trying to override governments that are responsible to national parliaments for budget expenditure. Having the MEPs overriding the will of national parliaments and elected heads of state, weakens the democratic nation state, as national parliaments, and citizens, are bypassed and stitched up. This cannot be allowed to continue. The UK has to abandon the EU's undemocratic and unaccountable arrangements. Britain’s future is dependent upon rejecting QMV and the Ordinary Legislative Procedure whereby Britain has been forced to accept EU measures, which was against in principle.
