Parliament Flexes Muscles: Tough Talks Ahead for EU Budget

The European Parliament in Strasbourg: "Surely a good day for European democracy." Zoom
DPA

The European Parliament in Strasbourg: "Surely a good day for European democracy."

The European Parliament moved Wednesday to reject the seven-year budget for the EU proposed by leaders of the member states. The body, stronger under the Lisbon Treaty, is expected to use its new power to secure concessions.

The president of the European Parliament had pledged a fight to make his institution be taken more seriously, and on Wednesday he delivered. Led by Martin Schulz, members of the European Union's only democratically elected body rejected a compromise European Union budget put forward by EU governments for the seven-year financing period between 2014 and 2020. Members of the European Parliament voted 506-161 against the budget, with 23 abstaining.

In its current form, the budget proposal does not "reflect the priorities and concerns" of parliament, members said in the vote. They argued that the EU requires a modern, future-oriented, flexible and transparent budget.

"We are prepared to negotiate for a better financial framework," European Parliament President Martin Schulz said on Wednesday. "With its (vote), parliament has shown that it must be taken seriously as a negotiating partner. This is surely a good day for European democracy."

The current budget is the first to be considered since the Lisbon Treaty went into effect in December 2009. Under the new European treaty, parliament now has the right to codetermination in setting the EU's budget. Without its approval, a deal agreed to after painstaking negotiations between leaders of the EU member states on Feb. 8 cannot go into effect. Now, the European Council, the powerful body headed by the leaders of the 27 EU member states, and parliament will have to seek a compromise deal.

Under pressure from Germany and Britain, the 27 EU leaders agreed to reduce the EU's budget for the first time at a special summit in February. Although the European Commission had said €1 trillion would be needed, leaders of member states agreed only to overall commitments of €960 billion and actual payments of €908 billion.

Parliament To Seek Concessions

European Parliament President Martin Schulz had called the sum "unacceptable" and delivered on a promise to veto the budget in Strasbourg.

The parliament isn't expected to try renegotiating the level of funds made available. Members of parliament have reportedly already accepted that they will not be able to sway EU leaders on that front. Instead, they will likely seek concessions from the European Council, including funds to cover the Commission's €16-billion budget deficit for the current fiscal year.

Additionally, parliament wants the right to change the financial provisions in three and a half years if they prove to be insufficient. The parliamentarians are also calling for the EU to be equipped with its own ability to create tax revenues, and it wants the Commission to create a proposal for such a program. Finally, parliament wants the European Commission to be able to reallocate unspent money at the end of the year to other projects instead of transferring that money back to the member states as current rules stipulate. European leaders already acknowledged at the February summit that they might be prepared to accept the latter.

The demands show a newfound self-confidence on the part of parliament. With the veto power in his hands, Schulz appears determined to get something in exchange for approving the budget. The European Parliament president, who is German and a member of the center-left Social Democratic Party, views it as his mission to make sure that the institution is finally taken seriously in Europe.

Thus, it is unlikely the discussions with the representatives of six-month rotating presidency of the EU, currently headed by Ireland, which is negotiating on behalf of the other member states, will be easy. Budget talks are to continue to the end of June, but are unlikely to fail. If they do, it would mean future budgets would have to be negotiated on a year-to-year basis -- a nightmare for every country involved.

dsl -- with wires

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