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Will EU leaders strike a deal on the budget?

22nd November 2012, Comments0 comments

European leaders are expected in Brussels today. Their challenge is to agree a new multi-year budget.

In contrast with the member states the EU hasn't got a budget deficit or any debts. The EU gets its money from the member states and in consultation with the European Parliament decides how this money is spent.

The EU can't borrow. If it wants to spend more it has to get this money from the member states but at a time when the EU is preaching austerity many countries also feel that it too should show restraint.

Recently we heard that the EU couldn't pay its bills. In fact it's the member states who decide which European projects are subsidised. As everybody had to make cutbacks the member states decided not to give the EU enough money to pay the bills that were on the way.

In the 2012 budget the EU dished out austerity to its civil servants. They have to work longer hours and will only be able to retire at a later date. The share of the EU budget that goes on the administration is some 6%. It's not a place where big savings can be accomplished.

Agriculture and regional subsidies make up the lion's share of the EU's expenditure, some 80% of the whole. Both can now look forward to cut backs. European trades unionists and employers both believe that EU cash could be used to combat the economic crisis, but there is hardly a government leader who is today prepared to defend this approach.

Agriculture may take 40% of the EU budget, but it is the only sector that is entirely run at the European level and today costs national treasuries hardly a euro.

In the talks each country is expected to defend its own national interest. Belgium favours an 'ambitious budget', but at the same time is insisting that it continues to receive 25% of the customs duties levied in the port of Antwerp.

EU leaders will struggle to reach a deal in the coming hours. A Belgian, the former Prime Minister Herman Van Rompuy, today's Council President, is playing a crucial role in the talks. Maybe leaders won't succeed, but if they do it will be a deal that national politicians can defend in their own parliament.

If there will be much leeway for a European dimension in these hard economic times remains to be seen.

Here in recent days all eyes here have been focused on the Belgian budget.In government circles there was relief that the budget for 2013 has now been agreed.

European politics still fails to inspire the majority of the population and its representatives. Prime Minister Elio Di Rupo didn't have to go to parliament to reveal his plans before the summit.

Each year Belgium pays 3.4 billion euros into the EU's coffers. Will European leaders be able to strike a deal? In the coming hours we will learn whether or not this is the case and what amount Belgium will be expected to pay in future. We will keep you posted.



[Flandersnews.be / Expatica] 

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