By Nick Mann | 19 February 2013

The long-term European Union budget agreed by member states earlier this month will only work if there is flexibility over when and how money is spent, European Commission president José Manuel Barroso said yesterday.

Under the Multiannual Financial Framework deal, the EU’s spending for 2014 to 2020 will be limited to €960bn, down from €994bn for the previous seven-year period. Barroso told European Parliament party leaders that these reductions were ‘disappointing’ and ‘considerably below’ what he had hoped for.

But he acknowledged that the deal reflected ‘the reality of a negotiation process involving 27 member states where unanimity is required’.

Barroso was speaking before the full Parliament meeting to discuss the budget, expected in the summer. MEPs have to approve the deal for it to come into effect.

With the ‘proper level’ of flexibility, the agreement could work, he said. There are currently billions of euros each year committed to the EU budget that remain unspent due to a ‘lack of absorption’ by recipient member states, Barroso explained. These were then returned to the member states which had originally contributed them.

‘I thus attach highest importance to the issue of flexibility between years and between headings for managing the gap between commitments and payments,’ he said.

‘In fact, this is much more than a technical question. It is a matter of highest substantive importance. In fact, at least as important as the overall amounts for commitments and payments is the capacity to effectively spend the amounts foreseen. And this capacity will to a large extent depend on the solutions we will find for flexibility – and by flexibility I mean maximum possible flexibility,’ he said.

European Parliament leaders had been ‘rightly demanding’ this flexibility, Barroso noted. He also endorsed their call for provision to be made for the budget to be increased mid-way through the MFF period.

‘The commission is responsible for the budget and must ensure sound financial management of it. This will only be possible in future with tight management of spending and with the kind of flexibility the European Parliament has been calling for,’ he said.

However, he added that it was important to recognise that ‘some positive steps’ had been taken by the leaders of the member states to support the EU’s growth and jobs agenda.

And he urged the Parliament to negotiate with the European Council to finalise a deal. ‘I think it is possible, if there is goodwill on both sides, to find a compromise at the end,’ he said.