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Tuesday, September 13, 2011

Member states shoot across Commission's bow in budget talks

It's unclear whether European Commission is embarrassed by yesterday's rejection, by eight member states, of its 2014-2020 budget proposal (also known as the MFF). But it was certainly sent a stiff message by the biggest net contributors.

After talks in Brussels, the UK's Europe Minister David Lidington and his counterparts from Austria, Denmark, Germany, Finland, France, Italy, the Netherlands and Sweden issued a statement warning:
"We need to make the best use of the European budget to create better conditions for growth and make Europe more competitive. We need to spend better, not to spend more."
They added,
"The Commission proposal is too high. The increases of spending over the next MFF are significantly in excess of what is needed for a stabilisation of the European budget. The new Multi-Annual Financial Framework (MFF) should not lead to an increase in national contributions to the EU budget."
According to the Treasury's calculations, the Commission's proposal would see annual cash contributions to the budget increase by 11% (based on this year's contribution) - figures that the Commission disputes. The UK's demands for a cash freeze were not discussed at yesterday's meeting, according to Reuters. However, the fact that these countries have signalled their intent to resist inflation-busting increases so early in the negotiation process is indeed encouraging.

Yes, the Commission doesn't have the easiest job, trying to find the balance between net contributors and net recipients, in addition to the European Parliament. And yes, the European Commission has been burnt in previous budget negotiations by tabling an initial proposal that was too far away from one or more of the negotiating parties' starting positions. And also, to be fair, it has made a bit of an effort by proposing a cut to staff numbers in the EU institutions. That's something.

But, in the eyes of the public, the Commission still looks completely out of touch when it repeatedly talks about its "justified requests" for more money since the EU budget is for "growth and jobs" (oh yes, that hugely successful job-creation scheme known as the Common Agricultural Policy).

The vital question remains however whether this burgeoning coalition of member states can come up with a concrete budget proposal of their own, which they can all agree on.


Rollo said...

We all saw Cameron returning victorious from Munchen waving a bit of paper saying 'peace in our time...I've just appeased the EU with a 3% increase in the budget'. Or was it from Brussels? Any, the resistance of this feckless twerp will be useless, he will give way just as he did last time.

Peripatetic Scribe said...

I feel their statement reflects the inner feelings of their respective populations. Even if we accept that the Treasury estimate of an 11% increase is slightly weighted to appease public opinion, a rise of double-digit proportions is unacceptable in these times. Yes, cutting numbers is one option (but how long will this take?). Concerning an alternative budget from those who fired the "warning shots" I would also like to see a revised budget from Brussels - and please do remember the fact that NO audited accounts have been presented since......?

Peripatetic Scribe said...

Rollo - if I may comment. I think it is wise to consider the potential impetus the 100+ Conservative MP's may well have in their new grouping, on the thinking and manoeuvrability of Mr. Cameron and his team. Their approach should not be taken lightly especially by the PM. Also, do remember Mr. Hague has expressed sympathy with their cause.

macrovolatility.com said...

I think that it is time to not only refuse increases,but review(I don't know "who" can review the Commission's activities?)what the Commission,with 11 000 "executives /workers",really does and what they really contribute to Europe's development and control of macro goals.