Budget battle sharpens age-old EU power struggle

Budget battle sharpens age-old EU power struggle

15th November 2010, Comments 0 comments

A bitter battle over the European Union budget is hurtling towards an embarrassing midnight Monday deadline -- and it is not about its size, but over who controls current and future spending.

Brussels--When negotiations collapsed in acrimony on Thursday, all sides, many reluctantly, had already agreed on a 2.91-percent 2011 increase.

But talks broke down over who controls what spending where, and not now but in the future.

It is a fight between national centres of power that have learned over decades to cooperate via cross-border alliances; and newly empowered EU lawmakers in Brussels waving a direct electoral mandate from half a billion citizens in 27 states -- albeit four years from their next test at the polls.

The struggle pits self-styled EU auditor British Prime Minister David Cameron against modern European integrationists, represented by the European Parliament.

In 2010, the EU had the right to spend EUR 123 billion (USD 170 billion) at a time of rampant cuts by national

administrations. An extra EUR 3.5 billion remains on the table for next year's budget.

But the European Parliament has walked away from the deal.

It wants a bigger victory -- to win influence over future EU income models and spending priorities right now.
The European Commission, the executive that makes the vast majority of EU payments, and the bloc's current Belgian chair, spent the weekend trying to pave the way for compromise.

The aim was to allow the parliament, emboldened by last year's Lisbon Treaty but still learning to stamp its authority on national capitals, to avoid bruising defeat.

Britain, France, Germany and Italy were "extremely staunch" in giving no ground, Cameron said at a G20 summit in South Korea Friday.

But that came after an EU diplomat said London and allies in the Netherlands, Sweden, Denmark and Latvia had only "tacit" backing from Germany and France -- so the sands may yet shift.

"This is about implementation of the Lisbon Treaty," said EU budget commissioner Janusz Lewandowski: about defining the "shape and model of cooperation" between states and the parliament in future decision-making.
And there are no bigger decisions than how money is spent.

The parliament wants big cross-border projects on energy infrastructure, for instance, to take precedence.
But all players "should be conscious also of the cost of non-agreement," Lewandowski warned.

Failure to reach a deal by the deadline would produce the nightmare scenario in which he would have to work off monthly budgets based on 2010 spending.

That would hamper core EU projects such as its fledgling global diplomatic service; strategic nuclear energy research; and new agencies set up to supervise financial markets come 1 January.

The dispute boils down to the "procedure for involving parliament in dialogue over the future for own resources," Lewandowski says.

Broadly interpreted, this means new EU-level taxes on citizens and businesses -- a European Commission proposal fiercely opposed by EU heavyweights such as Britain, France and Germany.
But as a first step it would probably involve money-market bonds. States currently fund three quarters of the bloc's revenues.

Lewandowski sees a difficult requirement to marry "full respect to the treaty and full respect of sovereignty for member states."

The parliament itself wants a greater say in this debate, including how the EU will fund itself over the next decade.
At a time when Cameron's government has proposed a referendum lock on future power transfers to Brussels, the British government's legal services say there is "no obligation to attend" parliamentary debates on this thorny question, in a document seen by AFP.

This matters, because states retain tax-raising sovereignty -- and with the effects of the economic crisis being felt everywhere, new taxes are hard to sell.

The EU parliament knows it is light years away from power on a par with national legislatures.

But since it represents a bloc that has removed physical borders for people, and tariff obstacles for goods and services, at least in theory, it is taking the moral high ground.

"The Lisbon treaty gives MEPs, as the directly elected representatives of some 500 million EU citizens, certain powers and what parliament wants is to agree on how these should be implemented in practice," it says.


 AFP/ Roddy Thomso/ Expatica

0 Comments To This Article