THE EU Commission set the scene for a testing battle with member states and the European Parliament as it sought a 4.9 per cent increase in its annual budget next year, significantly above the inflation rate.
As budget commissioner Janusz Lewandowski praised “Europe’s self-restraint” in its expenditure, Britain and the Netherlands said the proposed increase was far too high but Socialist MEPs criticised it as “minimal”.
With much of Europe in the grip of austerity policies promoted by the Commission, Mr Lewandowski accepted he was already in the line of “friendly fire” from several capital cities and anticipated “tough” talks.
“We are conscious while presenting our budget for 2012 of the mood for austerity in Europe,” said the commissioner, who is Poland’s member of the EU executive. His proposal is the opening salvo in a months-long negotiation in which the Commission hopes to strike a deal on a final budget figure with governments and MEPs by December.
The talks last year were especially contentious as governments faced down the Parliament’s demand for a 5.9 per cent rise with an eventual increase of 2.91 per cent in the 2011 budget.
The 4.9 per cent increase Mr Lewandowski is seeking would bring the EU’s annual expenditure to €132.7 billion, a rise he says is necessary to pay bills from projects already under way. “These are legal obligations and it doesn’t make sense to postpone them.”
The budget includes a €24 million allocation for an electrical interconnection project between Ireland and Britain, twice as much as this year in a project to which the EU is contributing €100 million.
With annual inflation rate in the 27 EU member states at 3.1 per cent last month, Mr Lewandowski’s proposal presents the greatest sensitivities to the wealthy member states who are net contributors to the EU budget.
Germany, France and Britain are already seeking a long-term freeze in the EU budget for 2014 to 2020 in separate talks beginning next year. That negotiation is likely to be even more difficult than the 2012 budget talks, given the inevitability of pressure on agriculture spending and other big budget lines.
There was no response on the 2012 proposal from Dublin, which remains a net beneficiary of the EU budget. “At this stage we’re not commenting. We’ll consider the Commission’s proposal,” said the spokesman for Minister for Finance, Michael Noonan.
But other governments were forthright. Dutch finance minister Jan Kees De Jager said the proposal was out of proportion. “How can we explain to our citizens who are tightening their belt that the European budget simply keeps on growing?” he asked. “We should cut in other areas instead of inflating the budget year after year.”
The tone was similar in London, where David Cameron opposes any increase in the EU budget. “A 4.9 per cent increase in the annual EU budget is not acceptable,” said a British government spokesman.
In the European Parliament, however, the powerful Socialist group said the EU should not be held responsible for the expanding budget deficits of member states.
“There is a strong temptation in some EU capitals to cut EU spending because of the need to cut national deficits. This approach is counterproductive,” said its budget spokesman, Göran Färm.