The Parliamentary Information Office is, with constitutional pundits generally, waiting for the results of today’s European budget negotiations prior to the presentation of the EU draft budget tomorrow, 23rd November 2012.

Prime Minister David Cameron will meet this morning, 22nd November 2012, with Herman Van Rompuy, the EU president, who is proposing a deal that would cut the overall budget, but reduce the value of Britain’s annual rebate.

Speaking earlier Mr Cameron said he would be “negotiating hard” against an "unacceptable” EU spending increase and defending the British rebate.

The Commission is to present a new draft budget on Friday 23rd November 2012. After that, negotiations will re-start between Parliament and Council, aiming for a deal to be adopted at the 10-13 December 2012 plenary session and yesterday discussions on the Budget dominated European Parliamentary activity.

Parliament's President Martin Schulz urged the blocking minority of member states to stop preventing the Commission from paying bills it is legally obliged to pay, in a debate in Strasbourg yesterday, 21st November 2012. These member states' refusal to agree on an amending budget for 2012 was the reason why budget negotiations broke down on 13th November 2012.

Mr Schulz, referring to the main cause of the current deadlock in the annual budget negotiations, said:

"There are some member states in the Council which are not willing to honour their own promises. They are trying to push the EU to adopt a deficit budget. They may have done this at home, and too often and for a too long, but this house is not willing to accept such procedures at European level.

“This is that a blocking minority of member states refuse to adopt an amending budget to enable the Commission to pay its bills, despite last year's promise to act promptly to remedy any such shortfalls.”

Mr Schulz added:

"If there are still unpaid bills for 2012, we cannot take any serious decision for 2013.

“The European Parliament is not willing to negotiate in this way. If we do not solve the problems in 2012, the EU will need to pay interest on the delays. This is not a proper way to run a budget, it is not sound financial management",

During the debate with the Cyprus Presidency of the Council and the Commission, several MEPs from various political groups underlined the same message.

The EU needs an adequate and flexible long-term budget to strengthen its economy and labour market, said most political group leaders in the debate. This was a signal to today's extraordinary European Council, which will seek a political agreement on the EU's Multiannual Financial Framework for 2014-2020. The Council must agree unanimously, and any deal must be endorsed by Parliament.

"We have to go below the Commission proposal", said Cyprus Deputy Minister for EU Affairs Andreas Mavroyiannis for the Council, pointing to the budgetary constraints across Europe The latest proposal, tabled by European Council President Herman van Rompuy, "includes all elements necessary for a deal", he added. This proposal is €80 billion less than the European Commission proposal of €1.033 billion for seven years.

The budget negotiations are "a test for the EU's credibility", said Commission President José Manuel Barroso. "Some people say 'let's cut!' and then pretend it does not make any difference. But a little difference in the EU budget makes a massive difference for the people depending on EU program. Just as an example; for every billion cut in the Horizon 2020 program, 4,000 small and medium sized enterprises lose funding", he said.

EPP-Group leader Joseph Daul warned that with a budget below 1% of European GNI "we cannot continue the current policies". Noting that 517 MEPs had voted in favour of a strong EU budget, he reiterated that the EU needs a sound and responsible budget to deliver on existing plans and promises, and added that "investing in the future is the only way out of the crisis".

S&D group leader Hannes Swoboda, strongly criticised the "everyone for himself attitude" taken by some member states: "We hear people talk about €50 billion less, €80 billion, €100 billion, even €200 billion less. It is a disgraceful race to the bottom, as if the EU budget was merely a numbers game, he said, adding that the EU needs "enough to perform".

ALDE group leader Guy Verhofstadt, compared the EU budget with national ones: "The whole debate is ridiculous. We talk about 1% of EU GNI, which is less than the budget of Belgium or Austria. The German and French budgets are both 8 to 10 times bigger than that of the EU. We need a strong EU budget, because pooling resources at EU level is the only way to beat problems at national level. We should be ready to block a deal that goes below the Commission proposal", he said.

For the Green group, Helga Trüpel said "Chancellor Merkel was wrong when she told us two weeks ago that 27 member states have decided to invest 3% of GNP in research and development. She leads a band of net payers who want to cut R&D by 12% and hide behind the current presidency".

Conservative Group leader Martin Callanan criticised those "who believe every problem can be solved by more Europe". He dismissed the idea that the EU budget is an investment budget, noting that 40% of it goes on farm subsidies and 6% on administrative overheads. Mr Callanan nonetheless said that cohesion funds should be maintained for those member states which need it most.

For the EFD group, Nigel Farage said "it is remarkable that the European Union is talking about taking another trillion Euro from EU taxpayers, despite the fact that the accounts have not been signed off for 18 years in a row. If this was a company, the directors, or in this case the Commission, would all be in prison."

For the GUE/NGL group, Gabriele Zimmer said "the additional funds asked for by the Commission merely reflect the increased tasks given to the European Union. It is not going to be used for more administration. For example, how can the EU continue to combat social exclusion and poverty if there is going to be a cut in the funding to the poorest of the poor? A different attitude must come forward in Council. People have to move away from these narrow, parochial, national interests."

The declaration, signed a year ago by all member states and Parliament, says: "The Council and the European Parliament ….... ask the Commission to request additional payment appropriations in an amending budget if the appropriations entered in the 2012 budget are insufficient. …... The Council and the European Parliament will take a position on any draft amending budget as quickly as possible in order to avoid any shortfall in payment appropriations."

The Parliamentary Information Office will report on the outcome of the Council negotiations and, of course, on the draft and final budgets.

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