MEPs voted today on an EU budget of €145,321.5 million as the Council and Commission gave in to demands for a reversal in budget cuts.
The Council had wanted EU spending slimmed down but the growing problem of €30 billion in unpaid bills had put extra pressure on national finance ministers.
A €4.7billion package to help settle some of the outstanding payments was approved, but the inability of the Commission to balance the books played into the hands of federalist MEPs who demanded the EU get more power to raise its own resources.
The spokesperson for the Socialist group which includes Labour MEPs crowed that they “managed to successfully undo the cuts initially proposed by the Council. We even achieved increases for Erasmus + (the exchange programme for young Europeans), Horizon 2020 (supporting research and innovation) and aid for refugees.”
But the left wing faction said that in the longer term, “the composition of the EU’s budget must be reviewed, especially the EU’s ‘own resources’ so that national interests in the Council do not undermine the budget. We will return to the discussions in 2015.”
“In terms of finding a real, sustainable solution to the payments crisis, we’re a long way from done. While the €4.7 billion from the payment of fines will allow the EU to settle some of the €30 billion in unpaid bills, we need a global strategy.
“We have also got a commitment from the Commission and the member states that they will produce a plan by the spring to balance the accounts.”
In the end, Parliament demands for outstanding bills from the 2014 budget to be settled were used against Council ambitions for spending cuts in 2015.
Parliament wanted the total sum of €8.88 billion in extra revenues from fines against companies breaching EU competition law to be used to reduce the backlog in unpaid bills. However, EU member states agreed to use €3.53 billion of this sum for this purpose, but decided to channel the remainder back into their national budgets where it is supposed to go.
Conservative and UKIP MEPs opposed the compromise budget package which were backed by the majority of MEPS.
UKIP’s budget spokesman Jonathan Arnott called the deal, which was agreed in secret meetings before today’s vote, “a classic fudge.”
And he criticised the money from fines which are normally returned to members states going towards the EU budget saying, “yet again we will effectively be paying more by the back door.”
“Nothing at all is being done to slim down the bloated EU bureaucracy, or to cut down on the money that is wasted year in, year out. At a time when drastic action is needed, this is a ‘business as usual’ budget. Both sides will claim success, but in reality all that will happen is that the British taxpayer will be fleeced for even more money and bills will continue to go unpaid.”
Richard Ashworth MEP, Conservative spokesman on budgets, said the agreement represented some progress, but had dodged key challenges.
“More needs to be done in terms of making unpalatable decisions about where we cut the budget. The process needs to deliver better value for money and to better reflect the budgetary restraint being taken by member states” he said.
The South East MEP added, “The figures fall below the initial Commission proposal and far below what Parliament was demanding. However it is simply a straight compromise between the Parliament and Council. The deal offers little concrete in terms of addressing outstanding budgetary issues including the payments crisis.”