Budget talks to drag on into 2013
Leaders divided over just €30bn as Van Rompuy tries to satisfy all sides.
Sides were taken, but talks remained calm
Disagreement deferred on staff pay and perks
MEPs disappointed at failure to reach agreement
Van Rompuy’s cuts and changes
MEPs unhappy at Mersch appointment
The way ahead
Unions withdraw December walk-out threat
When Herman Van Rompuy, the president of the European Council, decided on the second day of last week’s summit in Brussels to abandon his push for an agreement on the European Union’s long-term budget, the differences between member states’ leaders stood at around €30 billion. This represents less than 3% of the overall multiannual financial framework, which in Van Rompuy’s revised proposal – circulated late on Thursday night (22 November), the first day of the summit – foresaw a ceiling of €973bn for spending for 2014-20.
The €30bn constitutes the difference between Van Rompuy’s proposal – which is itself €81bn below the European Commission’s initial version – and what Angela Merkel, Germany’s chancellor, and David Cameron, the UK’s prime minister, believe is achievable in further savings. Most member states either support some extra reductions or accept that they are unavoidable, but they are at the same time fighting to shield the policies from which they benefit most.
The €30bn mark, diplomats suggest, is the real point of convergence for the group of net contributors, several of which had called for far deeper cuts. Cameron urged that an additional €50bn should be trimmed from the overall budget compared to the Commission’s proposal. Mark Rutte, the Dutch prime minister, demanded a cut of €100bn. “Frankly, the deal on the table from the president of the European Council was just not good enough. It wasn’t good enough for Britain, and it wasn’t good enough for a number of other countries,” Cameron said after the summit.
Contrary to many predictions, Cameron did not find himself isolated at this summit, though he came under fire from Mario Monti, Italy’s prime minister, who said it was “incoherent” for the UK to protect its rebate while demanding deeper cuts to spending overall. Most leaders left the summit in a conciliatory mood, expressing optimism that a deal was within reach.
Stage by stage
François Hollande, the president of France, stressed the importance of a two-stage process. All previous budget negotiations, he claimed, had needed an “exploratory” summit and a “conclusive” summit. This was, he implied, simply a stage that had to be gone through. There had, he said, been a rapprochement. “We have taken a move forwards to go towards a final conclusion,” he said.
But Hollande also made clear that he could not live with the level of cuts being demanded by the UK and Germany. “We must fund both cohesion and the Common Agricultural Policy,” he said, playing up France’s support for the cohesion countries.
In his compromise proposal of Thursday, Van Rompuy restored almost €8bn for EU farm aid and €10bn for regional aid that he had earlier proposed to cut.
Click Here: kanken kids cheap
Van Rompuy now has appeased both the 15 member states that are fighting to protect cohesion funding and the countries such as France and Spain that are fighting to protect the agricultural policy. At the same time, he has created some space to make additional cuts, to bring the fiscal hardliners on board.
Cameron predictably expressed disappointment that it was disappointing that Van Rompuy’s proposal failed to make further cuts and “simply redistributed money to buy off different countries”.
The Council appears justified in claiming “a sufficient degree of potential convergence to make an agreement possible in the beginning of next year”. The European Council’s upbeat conclusions ventured a prediction: “We should be able to bridge existing divergences of views.”
Whether that prediction comes true might depend on whether or not France and Germany can come together again. The close concertation between the two that was standard procedure under President Nicolas Sarkozy has given way to visibly less cordial relations between Merkel and Hollande. France and Germany entered this summit with little co-ordination of their positions.
This may in part explain the chaotic ending of the summit, where at one point on Friday morning diplomats were briefing reporters that the summit would go on into the night while others were saying with equal confidence that it was all over. Van Rompuy was at that point making a judgement call between the chances of striking a deal – and the danger that it might break down in acrimony.
Van Rompuy’s decision to call an end to the summit has now given everyone a bit of breathing space, and will allow France and Germany to seek closer co-ordination before the next summit, generally expected to take place in January or February.