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September 27, 2022

European Parliament rejects EUR 960 billion budget

MEPs demanded further negotiations on the EU’s multi-year budget. The EU legislators say the Council has ignored parliament’s new powers in budgetary policy.

The European Parliament rejected the 8 February European Council conclusions in their current form, reads a press release. While accepting the ceilings proposed by the Council, MEPs want more flexibility and efficiency within the budget. The resolution – prepared by the group leaders of the EPP, S&D, ALDE, Greens and GUE/NGL – was adopted by 506 votes to 161, with 23 abstentions.  The resolution highlights the growing problem of payment shortfalls, which prevent bills being paid and jeopardize EU programmes. Last year’s shortfalls meant that several important EU programmes, such as Erasmus, the Research Framework Programme and the Social Fund ran out of funds early in the year.  Parliament insists that the issue of unpaid bills from 2012 must be settled before concluding the Multiannual Financial Framework (MFF) negotiations, as agreed in last year’s budget talks. Parliament also wants a political undertaking from the Council that all bills falling due in 2013 will be paid in 2013, so as to avoid “rolling over” a deficit into the new MFF. The EU cannot legally run a deficit.The resolution gives Parliament’s negotiators a strong mandate to ensure that the MFF is flexible enough to allow available funds to be used optimally. Parliament also calls for a mid-term review of MFF spending, so as to give the newly-elected Parliament and Commission an opportunity to influence the budgets that they will inherit from today’s legislators. Furthermore, Parliament makes the case for a system of genuine own resources to fund the EU budget and stresses that all EU expenditure should go through the budget.

Next steps

The informal negotiations should result in a regulation laying down the MFF, for which parliament’s consent is required, as well as an inter-institutional agreement between Parliament, the Council and the Commission. Parliament is negotiating the legal bases for the various EU programmes in parallel, but for these, Parliament and the Council decide on the basis of co-decision. If there is no agreement by the start of 2014, the MFF ceilings from 2013, adjusted for inflation, will apply.The deal was reached by EU leaders in February at their second attempt, after a battle between countries which wanted their EU contributions to fall in line with national austerity cuts, and others which wanted to see EU spending maintained or boosted.Many MEPs, along with the European Commission, fell into the second category.“Today’s vote is a clear indication that the European Parliament has accepted the responsibilities given to it by the treaties and will fight for an improved budget for the EU,” said the leader of the Socialist grouping in the chamber, Hannes Swoboda, on Wednesday, according to the BBC. The MEPs are also calling for a mid-term review of the budget, to give newly-elected MEPs and the next European Commission a say after the European elections next year. The resolution says parliament rejects the Council’s conclusions on the MFF and believes the Council has ignored parliament’s new powers in budgetary policy, acquired under the Lisbon Treaty.  However, the resolution does not explicitly reject the 3.3% cut agreed by the Council at its marathon Brussels summit last month. The European Conservatives and Reformists group, which includes the UK Conservatives, put forward its own resolution, saying it accepted the budget ceilings set by the Council, as “a pragmatic and realistic response to difficult fiscal and economic conditions”, but this was rejected.

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