Deal reached on €960bn EU budget

Getting final agreement on the EU’s seven-year €960bn budget took just two hours in the end, after months of negotiations and compromises between all the bloc’s institutions.

The deal-maker after the European Parliament threatened to vote down the budget was having the member states agree to pay the outstanding money for this year’s budget — the last in the cycle.

The Taoiseach, who presented the final deal to his fellow EU leaders at the summit in Brussels last night said, “This is an important day for Europe. Our political agreement is an example of the EU rising to a challenge. Where there is belief, cooperation and conviction, Europe can deliver”.

Tanáiste Eamon Gilmore, who was lead negotiator on behalf of the member states said: “This political agreement represents a fair compromise that can be supported by all institutions. Once finalised, this unlocks €960bn in investment in growth and jobs over the next seven years.”

The Taoiseach will be in Strasbourg next Tuesday where he will get a sense of how enthusiastic the members of the European Parliament are about the budget.

The two biggest groups, the European People’s Party, of which Fine Gael is a member, and the Socialists, to which the Labour Party is affiliated, are expected to vote in favour.

However, some of the smaller groups like the Greens, who were not consulted about the final deal arrived at yesterday, are furious and say that in all the horse trading, Europe is the loser.

The original aims to streamline the deeply bureaucratic budget procedure — giving the EU its own source of revenue rather than having to rely on member states to come up with the sums every year, and ensuring money can be moved around from one area where it is not being spent to another — have been met only partially.

The high profile aim to shift money from policies like agriculture to what are seen as growth-enhancing areas like research and linking up the EU’s rail and IT infrastructure have been achieved to a limited extent, or not at all.

The problems created by the way the budget is devised is illustrated in what turned out to be a major stumbling block in securing agreement on what is known as the multi-annual framework — the seven- year budget.

This year, 2013, is the final year of the current multi-annual framework but there was a shortfall of around €11.2bn in the commission’s kitty. This came about because each year the money for that year has to be re-negotiated with the member states, and they reduce it from the originally agreed overall budget.

Many of the programmes and projects in member states approved by the Commission for EU funding — about 94% of the money goes back to the member states — were slow to get off the ground, and so the bills rather than trickling in over the past few years, have been coming into the commission now at the last minute — and amount to more than is left in the account.

The parliament — and the commission — were adamant that these must be funded rather than leaving them to come out of the new budget, which has already been cut to the bone. Member states agreed with the Irish presidency to hand over €7.2bn once agreement was reached with the parliament — and to consider funding the balance later in the year.

The breakthrough at the meeting yesterday morning — called by Commission President José Manuel Barroso and attended by the Taoiseach Enda Kenny, Tánaiste Eamon Gilmore, parliament president Martin Schulz and the negotiating teams — saw a gentleman’s agreement that the full €11.2bn would be paid over.

They also agreed that this may be the last seven-year budget as the Commission will examine changing the timing so that from 2020 the budget will be every five years and will coincide with the parliament elections and the change of the commission.