European leaders are inching towards a deal on the EU's new seven-year €1tn (£860bn) budget that should allow David Cameron to argue he has succeeded in forcing a real cut in Brussels spending.
The figures, exploiting a big gap between pledged spending and a more accurate estimate of what probably will be spent, will be fiercely contested at a two-day summit opening on Thursday in Brussels.
The signals on Wednesday evening, however, were that two separate sets of spending forecasts would be confected, enabling the main players to claim victory from very different positions.
EU leaders failed to agree on the new seven-year budget in November and a fresh failure over the next few days is likely to throw EU medium-term spending plans into acute disarray.
Angela Merkel, the German chancellor, traditionally the budget paymaster, went to Paris on Wednesday night to try to strike a deal with French President François Hollande.
A senior German official said the differences between the two sides were slight and they expected to agree on a "common direction" for EU spending.
Hollande said on Tuesday that his bottom line was €960bn for the 2014-2020 period, a figure which coincides with Berlin's marker of 1% of EU GDP. That figure refers to "commitments" in EU parlance, meaning legally binding budget pledges for EU projects.
The actual money spent, however, known as "payments", is always considerably less. Britain insists on the more accurate figure, based on payments made in 2011. Downing Street hopes to contrive an overall bill under €900bn.
"The British want a figure beginning with eight, the Germans a figure beginning with nine," said a source involved in the negotiations. The prime minister, however, is understood to be willing to settle for around €920bn as the payments ceiling.
That looked like a plausible outcome and at current prices would represent a real cut of more than €20bn on what has been spent over the past seven years, although the new figure would need to be adjusted for inflation in the years ahead.
The €960bn "commitments" figure is €13bn less than proposed by Herman Van Rompuy, the EU council president, in November.
Van Rompuy is to unveil his new budget draft on Thursday afternoon. Sources said it would shave €15-20bn from the November figure.
Cameron will argue at Thursday's summit that the "payments ceiling", referred to by British officials as a credit card limit which is more related to actual spending than the wish list of "payment commitments", must be below the €942bn suggested informally by Van Rompuy in November.
The prime minister will say that "tens of billions" must still be cut from this figure by cutting administrative costs. The prime minister will say that €7bn can be trimmed from the budget by making modest cuts to the salaries and benefits of EU officials.
Cameron, who will say that his government has trimmed the costs of running Whitehall alone by £12bn since 2010, will say that a further €7.5bn can be cut by freezing the ceilings on security, justice and external spending. Britain will make no serious attempt to cut agricultural spending on the grounds that this is a red line Hollande will not cross.
This means that Britain will not countenance any cuts in its multibillion-pound EU rebate.
"There's always a gap between commitments and payments. There will be a gap. That's normal," said a senior official involved in drafting the proposed deal. "They will play on the difference between commitments and payments.
That will allow France and Italy to claim they have defended their positions and Britain to claim they won," said a third senior EU official.
Berlin signalled on Wednesday it was prepared to pay more net into the EU budget to facilitate the deal, essentially by receiving less back than it pays in, while Mario Monti in Rome, facing elections in a fortnight, raised the prospect of vetoing a deal if Italy feels it is being shortchanged.
In the seven years up to the present, the budget amounted to €943bn in actual money spent. The figures being touted in Brussels are around €25bn lower than that, meaning that the prime minister would be able to argue he has secured more than a spending freeze.
Cameron has threatened to veto a budget agreement if it is higher than a real freeze. In October, the Commons – Labour and Tory rebels – voted against the prime minister, demanding overall EU budget cuts.
But the big fight is likely to be less over the headline figures than over how to carve up a smaller cake.
National and Brussels lobbying will press contrasting claims for farm subsidies, structural funds for the poorest countries and regions, the salaries, staffing and administration of the EU institutions, a new kitty aimed at getting the young back to work in areas of the highest unemployment, and infrastructure, broadband, and research investment aimed at spurring growth.
And the outcome will also have to gain the consent of the European parliament.
Cameron had been aiming to cap the payments ceiling at €886bn. It looked unlikely he would achieve that level of cuts. But the deal shaping up would come in at around €70-£80bn lower than the original proposals from the European commission last summer.
guardian.co.uk
The figures, exploiting a big gap between pledged spending and a more accurate estimate of what probably will be spent, will be fiercely contested at a two-day summit opening on Thursday in Brussels.
The signals on Wednesday evening, however, were that two separate sets of spending forecasts would be confected, enabling the main players to claim victory from very different positions.
EU leaders failed to agree on the new seven-year budget in November and a fresh failure over the next few days is likely to throw EU medium-term spending plans into acute disarray.
Angela Merkel, the German chancellor, traditionally the budget paymaster, went to Paris on Wednesday night to try to strike a deal with French President François Hollande.
A senior German official said the differences between the two sides were slight and they expected to agree on a "common direction" for EU spending.
Hollande said on Tuesday that his bottom line was €960bn for the 2014-2020 period, a figure which coincides with Berlin's marker of 1% of EU GDP. That figure refers to "commitments" in EU parlance, meaning legally binding budget pledges for EU projects.
The actual money spent, however, known as "payments", is always considerably less. Britain insists on the more accurate figure, based on payments made in 2011. Downing Street hopes to contrive an overall bill under €900bn.
"The British want a figure beginning with eight, the Germans a figure beginning with nine," said a source involved in the negotiations. The prime minister, however, is understood to be willing to settle for around €920bn as the payments ceiling.
That looked like a plausible outcome and at current prices would represent a real cut of more than €20bn on what has been spent over the past seven years, although the new figure would need to be adjusted for inflation in the years ahead.
The €960bn "commitments" figure is €13bn less than proposed by Herman Van Rompuy, the EU council president, in November.
Van Rompuy is to unveil his new budget draft on Thursday afternoon. Sources said it would shave €15-20bn from the November figure.
Cameron will argue at Thursday's summit that the "payments ceiling", referred to by British officials as a credit card limit which is more related to actual spending than the wish list of "payment commitments", must be below the €942bn suggested informally by Van Rompuy in November.
The prime minister will say that "tens of billions" must still be cut from this figure by cutting administrative costs. The prime minister will say that €7bn can be trimmed from the budget by making modest cuts to the salaries and benefits of EU officials.
Cameron, who will say that his government has trimmed the costs of running Whitehall alone by £12bn since 2010, will say that a further €7.5bn can be cut by freezing the ceilings on security, justice and external spending. Britain will make no serious attempt to cut agricultural spending on the grounds that this is a red line Hollande will not cross.
This means that Britain will not countenance any cuts in its multibillion-pound EU rebate.
"There's always a gap between commitments and payments. There will be a gap. That's normal," said a senior official involved in drafting the proposed deal. "They will play on the difference between commitments and payments.
That will allow France and Italy to claim they have defended their positions and Britain to claim they won," said a third senior EU official.
Berlin signalled on Wednesday it was prepared to pay more net into the EU budget to facilitate the deal, essentially by receiving less back than it pays in, while Mario Monti in Rome, facing elections in a fortnight, raised the prospect of vetoing a deal if Italy feels it is being shortchanged.
In the seven years up to the present, the budget amounted to €943bn in actual money spent. The figures being touted in Brussels are around €25bn lower than that, meaning that the prime minister would be able to argue he has secured more than a spending freeze.
Cameron has threatened to veto a budget agreement if it is higher than a real freeze. In October, the Commons – Labour and Tory rebels – voted against the prime minister, demanding overall EU budget cuts.
But the big fight is likely to be less over the headline figures than over how to carve up a smaller cake.
National and Brussels lobbying will press contrasting claims for farm subsidies, structural funds for the poorest countries and regions, the salaries, staffing and administration of the EU institutions, a new kitty aimed at getting the young back to work in areas of the highest unemployment, and infrastructure, broadband, and research investment aimed at spurring growth.
And the outcome will also have to gain the consent of the European parliament.
Cameron had been aiming to cap the payments ceiling at €886bn. It looked unlikely he would achieve that level of cuts. But the deal shaping up would come in at around €70-£80bn lower than the original proposals from the European commission last summer.
guardian.co.uk
No comments:
Post a Comment