EU budget: not yet a done deal

EU leaders have agreed the budget to the end of the decade in the Multi-annual Financial Framework (MFF).

The compromise agreement cut back most on the one area where none of the member states directly benefit – external expenditure.

The compromise includes:

• €58.704 billion for ‘Global Europe’ – enlargement, near neighbourhood, development, and humanitarian assistance – a cut of 16% compared to the European Commission proposal.
• €26.984 billion for the European Development Fund – a cut of 11%.
• €1.960 billion for the Emergency Aid Reserve – a cut of 20%.

In total this is a cut of 14.7% for all external action spending compared to the levels proposed by the Commission.

Despite a major obstacle to improving EU aid efficiency being a lack of human resources in EU delegations, the budget for EU administration has also seen cuts beyond the cost-cutting budget proposed by the Commission. As a result NGOs have expressed disappointment in the outcome.

EU leaders are therefore requiring the EU to do more in terms of external action as a result of the Lisbon Treaty, but with fewer resources in real terms, and lower administrative costs.

Impact of cuts

The likely impact of these cuts have already been noted in the media. This approach is unlikely to secure either greater impact, or the improvements to cost effectiveness everyone wishes to secure.

The compromise was welcomed to a greater or lesser extent by presidents of the EU – Herman Van-Rumpoy and José Manuel Barroso.

But the EU leaders’ compromise is not the end of the process and the MFF may yet be revised.

A key player to attend the start of the summit without attending the negotiations was Martin Shulz, another EU President – this time of the European Parliament.

His signature is necessary for the MFF to finally be adopted and this is dependent on a vote in the European Parliament. And the European Parliament has consistently called for the EU budget to be big enough for its goals – including in external expenditure.

Unprecedented move

In an unprecedented move immediately following the announcement of the deal by the European Council, a joint statement was issued from the four largest groups in the European Parliament rejecting this compromise.

The fact that this statement was supported by the Greens, the Socialists, the Liberals and the Conservatives (though this group does not contain the UK’s more Eurosceptic conservative MEPS) will make any vote to pass the compromise MFF very difficult.

This week is a “constituency” week for the European Parliament – meaning MEPs will be at home and no doubt subjected to considerable political arm twisting from their governments.

The vote should be a public and transparent one, although there’s already been so many suggestions that it be a secret vote there’s a campaign to make it public.

Clearly there’s still some way to go before the MFF is finalised. And still a chance for the external budget of the EU to be up to the job expected of it.