The Commission proposed, last April, the 2011 draft budget – €142.6 billion (£121,180 million) in commitments appropriations which represents an increase of €1,073 million (£912 million) or 0.8% comparing to the 2010 budget, and €130.1 billion (£110,616 million) in payments appropriations. At a time of severe strain on the majority of Member States’ public finances, where governments are reducing public spending, the Commission proposes an increase of €7,179 million (£6,102 million) or of 5.9 percent on the 2010 budget. The Council adopted, last July, by QMV its position on the EU draft budget 2011. It has agreed to a budget of EUR 141.777 billion in commitment appropriations and EUR 126.527 billion in payment appropriations. Although the Council has reduced the amount of the Commission proposed draft budget there is still an increase of 2.91 percent on the 2010 budget. The Council should have proposed lower figures as the UK has suggested. The Government has been endeavouring to reduce the EU 2011 Budget and, at least, to keep it at 2010 levels. The European Parliament has always sought a bigger budget for the EU than that proposed by the Commission and member states. On the day that George Osborne announced huge cuts in public spending, the European Parliament voted to increase the budget in 2011 requiring even more money from taxpayers.


The European Parliament rejected the position taken by the Council. Unsurprisingly, the 3.6 billion euros in cuts demanded by member states were rejected. The European Parliament said, in its resolution, that “Understands the concern expressed by some delegations in the Council that the pressures on Member States‘ budgets are particularly heavy for the financial year 2011 and that savings are all the more necessary” however it “considers arbitrary reductions in payments appropriations not to be in line with sound budgeting considers moreover that arbitrary reductions in commitments appropriations jeopardise the implementation of Union policies and programmes already agreed;” Hence, the European Parliament acknowledging that national budgets are already overburden is demanding a 5.9% increase in next year's EU budget compared to 2010 budget witch is considerably higher than the 2.9 percent proposed by member states.

The European Parliament proposed therefore a total of €130,56 billion in payments and €143,07 billion in commitments. The European Conservatives and Reformists group has called for a freeze on EU budget at 2010 levels. The ECR also tabled amendments to reduce the parliament's administrative budget, but they were outvoted.

The 2011 budget is the first to be negotiated under the Lisbon Treaty. The Lisbon Treaty has changed the budget procedure conferring further powers on the European Parliament. It has abolished the distinction between compulsory and non-compulsory expenditure, hence the Council has no longer the final say on compulsory expenditure (CAP expenditure and funding of international agreements). Consequently, the European Parliament is on equal foot with the Council, being able to influence the entire budget. Moreover, the procedure is supposed to be quicker as there is only one reading in both the Council and in the Parliament. There is, therefore, less time to negotiate it.

As the European Parliament amends the draft budget and rejected the Council position the Lisbon Treaty provides for a Conciliation Committee to be convened. The Belgian EU Presidency convened a 'conciliation committee' on 2011 budget which will meet on 26 October and the negotiations will last for 21 days. Such Committee will be composed of 27 Council representatives and 27 MEPs aiming at reaching an agreement on a joint text. If the Conciliation Committee does not agree on a joint text the Commission shall submit a new draft budget. As Bill Cash pointed out now "It all depends on whether, as a result of the forthcoming negotiations, we achieve a blocking minority in the vote on the conciliation agreement". He stressed “It is essential that the Government negotiate a blocking minority of 91 within the Council of Ministers to stop the increase at that point. The decisions will be taken by a majority of 14 out of 27 MEPs on that conciliation committee, together with a majority of the 27 member states on the Council of Ministers.” If a joint text is agreed the European Parliament and the Council have to approve it within 14 days. If both institutions approve the join text or fail to take a decision, or if one approves and the other fails to take a decision the budget is adopted in accordance with the join text. On the other hand if both reject the join text, the Commission shall submit a new draft. If the Council approves it but the European Parliament rejects it, the Commission shall submit a new draft budget. The EU would operate using the 2010 budget subdivided into "12ths", one for each month, until the budgetary arm reaches an agreement and the new budget enters into force. If the Council rejects the joint text but the European Parliament approves it, the MEPs may decide to confirm all or some of the original amendments before the joint text acting by a majority of its component members and three-fifths of the votes cast. In this case “where a European Parliament amendment is not confirmed, the position agreed in the Conciliation Committee on the budget heading which is the subject of the amendment shall be retained” and the “budget shall be deemed to be definitively adopted on this basis.”