MEPs and Council in budget deadlock

Date: 20/07/05

THE European Parliament and Council of Ministers have failed to agree on the EU's budget for 2006.

A high-level meeting last Friday (15 July) between the two institutions broke up with negotiations deadlocked.

Polish centre-right MEP Janusz Lewandowski, who led the Parliament's delegation, said the two sides were "as far apart as ever" on the draft budget.

He said he was disappointed with the position taken by the UK, current holder of the EU presidency, and other member states who want to set a € 111.4 billion budget for the EU's activities in 2006, compared with the € 112.6bn proposed by the European Commission, a figure which has been endorsed by Parliament.

Lewandowski said: "There is a glaring contradiction between what the UK and other member states say is needed to boost EU jobs and growth and what is being proposed in budgetary terms.

"Unless the money is found, these pronouncements are just empty rhetoric." The agreement of MEPs is required in order to set the budget and Lewandowski, chairman of Parliament's budgets committee, foresaw "a lot of extremely hard negotiations ahead".

Last week's conciliation meeting did agree that € 655 million earmarked for agricultural payments should be shifted to rural development.

Agreement was also reached on the amount that should go towards the reconstruction costs for tsunami-hit regions in the Indian Ocean.

But, although € 157m will be set aside to finance these reconstruction needs for the current year, Lewandowski maintained that € 13m is still needed to reach the total pledged by the EU for 2005.

He said he was "deeply concerned" that it would not be found and added that this highlighted the difference between the "Council's readiness to make commitments on the world stage" and "its willingness to find money to fulfil these commitments".

The two sides also agreed on aid for Slovakia in the wake of last year's storms in the Tatras.

The meeting decided on a series of cuts to the Commission's proposals, including € 150m from the agricultural budget.

A spokesman for the Council said the proposed budget figure of € 111.4bn for next year was nearly 5% more than the 2005 budget.

It was a "realistic" figure, he said, but one which could still be reviewed in the light of further negotiations.

A source at the UK presidency said: "We accept there are serious concerns but I think we can bridge these and get a deal on the budget later in the year.

"I would stress, however, that there are no divisions within the Council on next year's budget," added the UK official.

Parliament said that member states' priorities such as the Lisbon Strategy and the Millennium Development Goals were not "sufficiently" reflected in the presidency's current budget proposals.

A spokesman for Dalia Grybauskaite*, the budget commissioner, said: "The budgetary proposal we have made is, we believe, the minimum required to cover actual costs."

Parliament will debate the budget at its Strasbourg plenary on 26 September which will be followed by a second reading in Council in November and a vote by MEPs on 15 December.

The new budget is to come into force on 1 January.

Article reports on the negotiations between the European Parliament and the Council on the EU's budget for 2006. A high-level meeting on 15 July 2005 between the two institutions had ended with negotiations deadlocked.