The European Budget Agreement 2014/2020: the end of a “slight” budgetary suspense?

The European Council on 7th and 8th February 2013 was due to conclude with the multi-annual financial agreement 2014/2020. The agreement brought 18 months of negotiations between the Member States to an end. In all likelihood the total amount of the future European budget is very close to the conciliation proposal put forward by the President of the Council, Herman Van Rompuy in November 2012 (971.8 billion € instead of the 1033 billion proposed by the Commission). The imminent agreement had not been concluded to date because of last minute tensions. Germany and the UK asked for reduced spending. Given the political and budgetary weight held by these two countries the final compromise was therefore due to be below the pre-agreement in November ie slightly below €970bn.

Several lessons might be learned from this negotiation. From a procedural point of view it reveals the growing role of the Presidency of the European Council. However the budget has been affected by the crisis.

The States have been especially careful not to increase the EU's overall budget in order to avoid increasing their participation. Budgetary rationale has won the day. The final result was in fact extremely close to the one that was originally put forward in December 2010, via a coalition of the main net contributors to the European budget. These five States (Germany, France, UK, the Netherlands and Finland) representing 55% of the financing of the budget and 2/3 of the net balances have imposed their will. Could it have been otherwise? The same situation arose with the conclusion of the financial agreement 2007/2013. With this experience in hand the result of the negotiation was almost a foregone conclusion. France has been rather embarrassed by this negotiation because its goals have been so confused (stabilising the budget, defending the CAP, regional aid and revival). Budgetary rationale won the day there also.

In spite of the burden of budgetary inertia, with every State finally privileging the spending it enjoys today rather than opting for the possibilities it might have tomorrow – the budget is developing very slowly as the financial frameworks succeed each other. In 2020 the CAP will only represent one third of the European budget. The European Parliament now has to place its seal of approval.

ESO: Background information: Website: Multiannual Financial Framework 2014-2020 http://www.europeansources.info/record/multiannual-financial-framework-2014-2020/

ESO: Background Information: European Coal and Steel Community Treaty Expires, July 2002 http://www.europeansources.info/record/european-coal-and-steel-community-treaty-expires-july-2002/

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