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European Parliament displays little courage in its report on the future EU budget

This month (June 2011) sees the real start of the negotiations on the future EU budget framework for the coming years. On Thursday 9 June the Parliament will vote on the opinion prepared by its Policy Challenges Committee setting out its views on the size, structure and duration of the next multi-annual financial framework (MFF).

On 29 June the Commission will publish two legislative proposals, one on future own resources and the other on the MFF. These will be accompanied by impact analyses including of potential new own resources. This will be the first real indication of the Commission’s thinking on the future resources to be made available for the Common Agricultural Policy, although many months of hard negotiating lie ahead before an eventual agreement is reached. The current MFF runs until the end of 2013.

The Policy Challenges Committee report

A year ago, the Parliament set up a special committee on the policy challenges and budgetary resources for a sustainable European Union after 2013, also known as the SURE or Policy Challenges Committee. Its remit was to prepare the Parliament’s opinion on the political priorities for the post-2013 period and on the necessary budgetary resources to implement these priorities.

The Committee’s report (which given its wide representation will likely be approved by the Parliament as a whole) includes the following recommendations:

    An overall increase in the EU budget of 5% (from 1.06% to 1.11% in commitment appropriations measured in 2013 prices)
    A spending structure divided into six headings. Four of these would cover internal policies (knowledge, cohesion, natural resources and sustainable development, and citizenship, freedom, security and justice), a fifth would cover external policies and the sixth administration.
    Continues to favour the replacement of the GNI-based own resource with alternative taxes directly under EU control
    Funding for agricultural and regional policy to remain at current levels
    Calls for the creation of a ‘global MFF margin’ to give the EU flexibility to respond to unexpected events
    The MFF to last for one further 7-year cycle to 2020 and then to move to a 5+5 cycle to bring it more into line with the Parliament’s 5-year mandates.

Powers of the Parliament

The Parliament’s powers under the Lisbon Treaty differ with respect to the financing and spending sides of future EU budgets. The EU’s own resources are decided using the consultation procedure, where the Council decides unanimously after noting the opinion of the Parliament. Decisions to introduce a new own resource or to abolish an existing one must also be approved by the Member States in line with their respective constitutional requirements.

The spending side of the MFF is decided using the consent procedure. This means that the draft outline is prepared unanimously by the Council and is then forwarded for adoption (or rejection) by a majority of the members of the Parliament. The Parliament does not have the power to propose amendments.

However, the Treaty further notes that ‘Throughout the procedure leading to the adoption of the financial framework, the European Parliament, the Council and the Commission shall take any measure necessary to facilitate its adoption.’ The Parliament believes that this imposes an obligation on both the Council and the Commission to carry out negotiations to prepare a text on which the Parliament can agree. It will be interesting to see how this works out in practice.

Can the Parliament learn to say no?

The difficulty is that the Parliament does not show itself to be a credible negotiating partner. The SURE report is just a shopping list of desirable and not-so-desirable programmes and projects for which increased funding is sought. There is not one paragraph in the document where the SURE committee feels that there is even the slightest possibility that EU spending might be reduced. This inability of the Parliament to prioritise, even in the light of the huge fiscal challenges and austerity programmes being undertaken by many EU member states, strips it of any moral authority to be taken seriously in the coming negotiations on the MFF.

Update Wednesday 15 June 2011
The Parliament as expected voted in favour of this report on 8 June last. The debate can be read here.

In passing, it is interesting to note the comments of Richard Ashworth, of the ECR Group, which echoes the conclusion of my post:

In the Special Committee on Policy Challenges and Budgetary Resources for a Sustainable European Union after 2013 we rightly talked about priorities, but then we never acted on it. There was no evidence of a willingness to take tough choices, the kind of choices which are being taken by governments all over Europe at this time.

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