The Conciliation Committee has not reach an agreement on the 2013 budget before the deadline. Consequently, the European Commission had to put forward a new draft budget for 2013. In fact, it adopted a new proposal, with no time, as a last attempt to reach an agreement between the European Parliament and the Council as quicker as possible. But, one could easily conclude that both proposals are basically the same, as the Commission has not made any cuts to its original proposal.
The Commission, the European Parliament and the Council Presidency all worked at speed of light so that a deal could be reached before the end of the year. In fact, on 29 November, the Cyprus Presidency, the European Parliament representatives and the European Commission, at a behind closed doors trialogue meeting, reached an agreement on the size of the 2013 budget and on draft amending budget for 2012.
On 6 December, the Council approved the agreement with the European Parliament on the 2013 EU budget, endorsing, therefore, the deal reached between the Cyprus Presidency and the European Parliament.
Hence, they accepted €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, an increase of 2.4% if we take into account the 2012 amending budgets.
Although the 2013 EU budget will be below the €137.9 billion in payments and €151.15 billion in commitments as proposed by the European Commission and the European Parliament, it is higher than the budget initially proposed by the Council. Hence, it will be higher that the freeze demanded by the UK Government.
It should be stress that because of QMV, the UK Government has not succeeded in ensuring deep cuts to the EU’s 2013 budget. The Government voted against such deal, but it could not reach a blocking minority.
It is important to note that according to the Office for Budget Responsibility, the UK will pay more £1.5bn to the EU budget in 2013. Hence, next year, UK’s taxpayers would have to pay £7.3 billion to the EU budget.
It is important to recall that the European Commission has tabled a draft amending budget no 6 for 2012 to fill a gap of €9 billion between the payments foreseen in the current budget and the commitments in areas such as research, the Erasmus student exchange programme and EU social and development funds. The EU Member States have therefore been asked to pay further contributions to make up for shortfalls in this year’s EU budget. Whereas, unsurprisingly, the European Parliament has endorsed the Commission’s proposal for a €9 billion increase on this year budget, the Council could not agreed on such amount.
However, the Council also approved the compromise deal on draft amending budget no 6 for 2012. They agreed to add €6 billion to the budget for 2012, instead of the €9bn as initially proposed by the European Commission. Furthermore, “additional redeployments of EUR 100.46 million between various budget lines have been agreed.” Nevertheless, the €2.9 bn gap will have to be filled by the 2013 budget. In fact, Martin Schulz, the president of the Parliament, has made clear that the European Parliament will only approve the 2013 budget if there are guarantees that the 2.9 bn would be covered by the EU's member states, adding up to the just agreed budget of €132.84 billion. He said, in a statement on the EU budget 2013, “Bills for the budget year 2012 cannot be financed through shifting within the already underfinanced budget 2013, but must be provided by the Member States additionally”, stressing, “this is a precondition for a final positive vote in the European Parliament.”
The
European Parliament and the Council agreed, therefore, on a joint statement “Payment needs for 2012”, whereby “the Commission undertakes to present at an early stage in the year 2013 a draft amending budget devoted to the sole purpose of covering the 2012 suspended claims” and “without prejudice to the proper implementation of the 2013 budget.” The European Parliament and the Council made a commitment to “take position on this draft amending budget as quickly as possible in order to cover any outstanding gap."
Moreover, according to a Joint statement on payment appropriations for 2013, “The European Parliament and the Council are aware that a draft amending budget may possibly be required as early
as mid-2013.” Consequently, we should expect the budget to be amended several times during 2013.
It is also important to note, if the European Court of Justice decides in favour of the European Commission, which is very likely to happen, the 2013 would have to be also amended to include the budgetary impact of the 2011 salary adjustment for the EU institutions in the 2013 budget.
The European Parliament is expected to approve the compromise deal on 13 December. If the EU 2013 budget was not adopted by the end of the year, spending would have to be frozen at 2012 levels and the EU institutions would have to live on a month-by-month basis with reduced funding. Obviously, Brussels does not want to work under the system of the "provisional twelfth." But, such outcome would have been welcomed. It is appalling whilst the EU is imposing austerity on Member States, and all Member States are reducing public spending and increasing taxes, Brussels wants to increase its own budget.
