MEPs reject seven-year EU ‘austerity budget’

14 Mar 13
Members of the European Parliament have overwhelmingly rejected the proposed long-term budget for the European Union.

By Vivienne Russell | 14 March 2013

Members of the European Parliament have overwhelmingly rejected the proposed long-term budget for the European Union.

They were considering the plans put forward by the European Council in February to trim the EU budget for 2014 to 2020 by 3.3%.

MEPs voted by 506 votes to 161 in favour of a resolution rejecting the budget measures and calling for more flexibility and efficiency. Five political groups prepared the resolution: the alliance of Socialists & Democrats; the centre-Right European People’s Party; the Greens; the alliance of Liberals & Democrats; and the Nordic Green Left.

In particular, the MEPs highlighted the growing problem of payment shortfalls in EU programmes such as the Erasmus higher education exchange scheme, the Research Framework Programme and the Social Fund, all of which ran out of money early in the year. The Parliament is insisting that all unpaid bills for last year and this be settled before negotiations on the long-term budget, known as the Multiannual Financial Framework, can be concluded.

The resolution also denounced the ‘lack of transparency’ on the political negotiations that gave rise to the council’s proposals.

Ivailo Kalfin, negotiator for the Socialist and Democrat group in the Parliament said MEPs could not accept the budget proposals in their current form.

‘The European Council has approved a budget of austerity and not just for one, but for seven years. With €908.4bn in payments, EU spending will be capped at 0.94% of Europe's wealth, which is the same level as in 1988/89. This is simply not acceptable.’

He added that the MEPs’ demands were reasonable.

‘First of all, we don't want to enter the negotiations with a huge debt.

‘The gap between payments and commitments in the past three years has pushed the EU budget into deficit. We need to find a solution to the mountain of unpaid bills we have before us. This threatens the EU's credibility.’

Kalfin said the EU needed to find a way to become self-financing by moving to a system of own resources. ‘The current system of national contributions is on its knees. The introduction of a financial transaction tax could be used as a starting point.’

Joseph Daul, chair of the centre-Right EPP group, said: ‘We do not believe in a crisis budget for seven years.’ He backed calls for more flexibility between budgetary years and the shift to own resources.

‘The ball is now in the European Council’s court if it, like us, wants to reach an agreement before the summer,’ said Daul.

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