EU hits budget problems – again

Liina Valdre
, reporter
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Photo: Heiki Rebane / BNS

Turns out, counterparties got it confused regarding agreement supposedly reached over budget this summer. The European Parliament may not ratify it in October, the entire process thus again delayed for months.

For Estonia and other cohesion policy countries, the severest headache being that with the budget remaining «open», structural funds planned cannot be tapped at start of New Year.

«In summer, everybody seemed to have agreed and all was well; in hindsight, they disagree about what exactly was agreed,» Erik Marksoo, responsible for budget issues at EU permanent representation, explained to Postimees. 

For final ratification of the budget, European Parliament laid down the requirement of a supplementary budget for 2013. Basically, this would mean that, out of this year’s budget, €11.2bn would be taken to cover 2012 debts.

Agreement not honoured

The bulk of it – €7.3bn – was paid up by member states, over the summer. Now, at the end of September, European Commission reminded the states of the €3.9bn yet to be paid. Thus, close to 4 billion euros are slow in coming. Meanwhile, net contributors are not keen on being demanded extra. The more so, at year’s end.

The current confusion is caused by the council having gotten the impression that the €3.9bn issue would be tackled as budget issues were settled – assuming the parliament thought the same. Right now, the reality is that parliament demands decision on the missing billions, before ever voting over the long-term budget.

As forcefully proclaimed by European Parliament president Martin Schulz, in Tallinn: it is not the parliament holding back the budget; it is the member states not sticking to agreement. He underlined that once agreement was honoured, parliament stood in readiness to ratify budget in October, already.

According to Mr Schulz, the problem is fractious member states setting national interests above common EU ones. At that, Mr Schultz refrained from pointing any out.

Multitasking

In addition to the €3.9bn reminder, the commission this week submitted yet another budget amendment. Now, the council reviews these together and seems in a hurry to get it over with. With luck, they will decide within a couple of weeks.

With no luck nor clarity – sadly, quite the norm in EU – the parliament will again postpone the ratification of budget, either to November or even December.

According to Mr Marksoo, things are complicated, the issue not merely being next seven years budget framework – at the same stroke, the current year amendments have to be discussed, as well as 2014 EU budget. The parliament being unwilling to ratify long-term budget before the 2014 one – and vice versa. Meanwhile, use of structural funds is linked up with long-term budget. All is intertwined.

Mr Marksoo says budget talks have always been a tough job. Even so, never as tough as this time around. One reason: up to now, budget sizes have always been on the increase. This being the first one to shrink.

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