European Parliament says no to budget

The European Parliament yesterday overwhelmingly backed a proposal by its Budgets Committee to reject the EU budget deal reached between the 25 member states at the end of last year.

Instead, MEPs approved a resolution calling for negotiations over the level of the provisions for the period 2007-2013 and also on spending plans. The resolution was adopted with 541 in favour, 56 against and 76 abstentions.

During a short debate, MEPs were very critical of the €862 billion allocation agreed by leaders. Originally, the EP demanded a total budget of €975 billion.

MEPs said they rejected the European Council's common position in its current form because it did not guarantee an EU budget enhancing prosperity, competitiveness, solidarity, cohesion and security in future, in compliance with policies already decided by the Council itself.

The resolution states that the agreement reached fails to fulfil commitments made towards the new member states and does not provide for a sufficient and detailed flexibility mechanism. Neither does it make a firm commitment to undertake the review with a clear role for the European Parliament or sufficient accompanying measures, such as to ensure better implementation and control of expenditure of funds in member states. Although MEPs are demanding more money, something which will be very difficult to achieve, this does not mean that Malta would necessarily be given more than the €805 million it has already been allocated. On the contrary, an increase in the total EU budget can result in fewer funds for Malta as its own contribution will have to increase resulting into a lower net position.

Discussions will now be held on a tripartite system involving the European Parliament, the Council and the Commission.

The Commission is expected to hand in a draft inter-institutional agreement on the financial perspective early next month on which parties will then negotiate.

Although there is no deadline as such for the completion of the negotiations, there is a shared willingness to wrap it up by this spring.

The EU budget will not become effective until it is approved by Parliament.