Last April, the European Commission presented the 2012 EU’s draft budget, completely ignoring several Member States calls for an EU 2012 budget freeze. The Commission proposed the 2012 draft budget – €147.4 billion in commitments appropriations which represents an increase of €5 324,3 million or 3.7% comparing to the 2011 budget, and €132.7 billion in payments appropriations, which represents an increase of €6.2 billion or of 4.9% on the 2011 budget.
The Council adopted, yesterday, by QMV, its position on the EU draft budget 2012. It has agreed to a budget of EUR 129.088 billion in payments as compared to the Commission's €132.7bn proposal, and EUR 146.245 billion in commitments. Although the Council has reduced the amount of the Commission proposed draft budget there is still an increase of 2.02% compared to 2011. The Council should have proposed lower figures as the UK has suggested. In fact, the UK, Austria, Denmark, Finland, the Netherlands, Sweden voted against such proposal. The UK has called for a spending freeze for 2012, but these member states did not have enough votes to block the compromise draft by the Polish EU Presidency.
The Council’s formal position is now the Polish presidency mandate to negotiate the 2012 budget with the European Parliament. The European Parliament's first reading is scheduled for October. It remains to be seen what will come out from the negotiations between the Council and the European Parliament. The European Parliament has always sought a bigger budget for the EU than that proposed by the Commission and Member States.
The budget is deemed to have been adopted if the European Parliament within 42 days from the Council communication approves the Council draft budget or has not taken a decision. If the European Parliament amends the draft budget, the Lisbon Treaty provides for a Conciliation Committee to 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. It is very likely that a conciliation committee would be convened, as happened last year, it would be, therefore, essential for the UK to achieve a blocking minority in the vote on the conciliation agreement. If the Conciliation Committee does not agree on a joint text within 21 days, the Commission shall submit a new draft budget. Last year, the Member states and the European Parliament could not agree on the 2011 budget. The Conciliation Committee could not reach an agreement before the deadline. Consequently, the Commission had to put forward a new draft budget. If the EU 2012 budget is not approved before the end of the year, spending would have to be frozen at 2011 levels. And, Brussels would have to work under the system of the "provisional twelfth."
