Next year’s EU budget set for approval by MEPs

By Martin Banks

Date: 08/12/05

MEPs are expected to approve the EU budget for 2006 at next week's European Parliament plenary in Strasbourg (12-15 December).

The figure for payment appropriations next year will be EUR 111.97 billion - equivalent to 1.01% of the EU's gross national income - and EUR 121.3bn in commitment appropriations.

Compared with the 2005 budget, these amounts represent a 4.1% increase in commitments and just over 5% in payments.

The 2006 budget drawn up by the Council of Ministers had proposed EUR 111.4bn in payments and EUR 120.8bn in commitments while Parliament voted in its first reading for significantly higher payments.

After protracted negotiations, a compromise has finally been reached between the Council, Commission and Parliament.

Parliament's budgets committee adopted the proposed 2006 budget at its meeting on Monday (5 December) and the plenary is expected to endorse the package in a vote next Thursday (15 December).

Lithuanian deputy and EPP-ED budget spokeswoman, Laima Andrikien, said she was "satisfied" with the deal, adding: "Both Parliament and the Council proposed and accepted numerous compromises and I expect Parliament will adopt the budget next week."

Budgets committee chairman, Polish EPP-ED member Janusz Lewandowski, said the compromise was "a good omen" ahead of next week's crunch EU summit in Brussels as well as proof that "the Parliament and Council can agree on complex financial dossiers".

Many have been closely watching the negotiations over the 2006 budget which is widely seen as a benchmark for future expenditure.

Parliament's rapporteur on the 2006 budget, Italian Socialist MEP Gianni Pittella, said the result was "important in the light of the upcoming discussions on the next financial perspective, as the level of payments decided for 2006 is higher than that proposed in the Luxembourg and British compromises for 2007-13".

In the event of EU leaders failing to broker a deal next week on a budget for 2007-13, the Union will function with provisional yearly budgets which will represent, each month, a twelfth of what was spent the year before, so the 2006 budget would become the reference figure.

As part of the 2006 budget, about EUR 275 million will be allocated to the flexibility instrument, which funds civil crisis interventions.

A Parliament spokesman said: "This was a major bone of contention at the conciliation between Parliament and Council, which had refused to go above EUR 200 million.

"But this use of the flexibility instrument will make it possible to finance reconstruction in Iraq and in countries hit by the tsunami. It will also help the African, Caribbean and Pacific countries affected by the sugar reform and provide more money for the common foreign and security policy [CFSP]."

The total funding for the CFSP for 2006 will rise to EUR 102.6m, an increase of EUR 40m compared to the 2006 preliminary draft budget. The Council has also accepted Parliament's request to provide EUR 100m in extra funding for a range of programmes seen as crucial to achieving the goals of the Lisbon Strategy, including the Socrates programme for research, SMEs and cultural organisations.

Author says that MEPs were expected to approve the EU budget for 2006 at the European Parliament plenary in Strasbourg, 12-15 December 2005.