Last April, the European Commission presented the 2013 EU’s draft budget, proposing, unsurprisingly, a considerable increase, completely ignoring, in this way, the calls from several Member States, including the UK, for an EU budget freeze.
The Commission proposed the 2013 draft budget – €150.9 billion in commitments appropriations that represents an increase of 2% comparing to the 2012 budget, and €137.9 billion in payments appropriations, which represents an increase of €9 billion or 6.8% on the 2012 budget. The EU budget commissioner has justified the EU budget increase to meet prior commitments, particularly projects in the area of EU regional policy. However, it is important to recall, the European Commission is calling for fiscal discipline across the EU and it is imposing austerity measures on several member states, as Mark Hoban, Financial Secretary to the Treasury, said “At a time when Governments across Europe are making difficult decisions on public spending, a 6.8% increase in EU spending in 2013 is completely unacceptable”. Moreover, he said, “The EU budget, funded by EU taxpayers, cannot be immune from the changes that are sweeping across Europe.” In fact, the Government noted, “that the proposed increase would impose unaffordable costs on taxpayers in the UK and other Member States”.
The Commission’s proposal would, obviously, entail an increase in the UK’s contributions to the EU budget, which has been estimated to be around €1 billion more than in 2012.
The UK cannot veto the Commission’s proposal, hence, as Mark Hoban noted, “the Government's success in the 2013 negotiation will depend on corralling a group of like-minded Member States around a strong position on the 2013 EU Budget.” In fact, several Member States, including Germany and France, have been showing their opposition to the proposed increase in the EU’s 2013 budget. However, just the Netherlands and Sweden have backed the deep cuts proposed by the UK.
The Council adopted, today, by QMV, its position on the EU draft budget 2013. It has agreed to a budget of EUR 132.70 billion in payments and EUR 149.78 billion in commitments. Compared to 2012, whereas the European Commission has proposed for an increase of €3,031.5 in commitments appropriations and €9 billion in payments appropriations, the Council's position provides for an increase of EUR 1.88 billion and EUR 3.61 billion respectively. The Council has therefore called for reducing the payments by a total of EUR 5.23 billion and the commitments by EUR 1.15 billion.
Although the Council has reduced the amount of the Commission proposed draft budget there is still an increase of 2.79% compared to 2012. The Council should have proposed lower figures as the UK has suggested. In fact, the UK, the Netherlands and Sweden voted against such proposal, but they did not have enough votes to block such compromise, which has been described by the Government as “unhappy.”
The Council’s formal position is now the Cyprus presidency mandate to negotiate the 2013 budget with the European Parliament, whose first reading is scheduled for October. The European Parliament has always sought a bigger budget for the EU than that proposed by the Commission and Member States. Hence, the MEPs are very likely to amend the Council’s position on the draft budget, and, as provided in the Treaty, a Conciliation Committee would be convened. Such Committee will be composed of Council representatives and representatives of the European Parliament aiming at reaching an agreement on a joint text. A three-week conciliation period is likely to start on 24 October. If the Conciliation Committee does not agree on a joint text within 21 days, the Commission shall submit a new draft budget. If the EU 2013 budget were not approved before the end of the year, spending would have to be frozen at 2012 levels. And, Brussels would have to work under the system of the "provisional twelfth." It is, therefore, essential for the UK to achieve a blocking minority in the vote on the conciliation agreement.
The Government has acknowledged that the Council would “come under pressure from both the Commission and Parliament to increase spending and move away from the 2.79% increase”. Consequently, according to Mark Hoban, the Government has “worked with France, Germany, the Netherlands, Sweden, Austria, Finland and Denmark, not only outlining our disappointment with the 2.79%, but making it clear in a statement (…) that further increases to EU spending should not be agreed later this year.”
Hence, because of QMV, the Government is no succeeding in ensuring deep cuts to the EU’s 2013 budget. According to Bill Cash, “firmer steps” should be taken “in the light of the changed relationship that has resulted from these times of austerity.” While noting that “other member states have been breaking the law all over the place” and “The whole of the fiscal compact was unlawful”, Bill Cash believes “we should say no to the final results.” In fact, he pointed out “If we were to adopt a Swiss-style relationship and negotiate a proportionate drop in our net contributions, we would be able to save at least £7 billion for the British taxpayer.” Thus, he stressed “That is the direction we should go in. It is time that we said no, not maybe.”
