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The battle for the EU's long-term budget

MEPs demand robust and flexible budget and reformed revenue system for the EU

 
 
Euro coins forming the Euro symbol   Parliament is calling for a robust budget for the EU ©Belga/Illustra

The EU needs a robust budget to meets its political goals, MEPs told EU leaders, who discussed the 2014-2020 budget plan on 28-29 June 2012. The long-term budget should be flexible enough to cope with new challenges and contributions from national coffers should be replaced by other ways of funding the EU budget,  Parliament said.


In the resolution, adopted by 541 votes to 100, with 36 abstentions, MEPs insisted that the budget frame for 2014-2020 should "provide enhanced budgetary flexibility within and across headings, as well as between financial years ... in order to ensure that budgetary resources can be appropriately aligned with evolving circumstances and priorities".


They believe that the lack of flexibility in the current system has made it very difficult to react to new challenges. It was for instance hard to find financing for the nuclear fusion research project ITER, a new priority that arose in the middle of the current budget period. The smaller the budget is, the greater the need to be able to reshuffle resources to deal with unexpected events.


Parliament' blessing is needed before the Council can adopt the Multiannual Financial Framework (MFF), or budget plan, (by a unanimous vote). It therefore demands fully-fledged negotiations with the Council on all MFF-related aspects.


Reform of revenue system


Under the treaties, the EU budget must be "financed wholly from own resources". Parliament says reforms to the current system, introducing alternative sources of income such as a financial transaction tax or a new EU VAT, would reduce EU member states' contributions based on gross national income (GNI) from 75 % to 40 % by 2020 It is "not prepared to give its consent to the next MFF regulation without political agreement on reform of the own resources system, putting an end to existing rebates and other correction mechanisms".


Parliament was the first EU institution to adopt a position on the next long-term budget frame, for 2014 to 2020 on 8 June 2011. The European Commission tabled its proposal on 29 June 2011.


Story originally published on 13 June 2012

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