Budget row intensifies as Council unveils its 2012 spending plans

Commission officials accuse Council of ‘smoke and mirrors’ budget proposal.

European Commission officials have accused the Council of Ministers of using “smoke and mirrors” in presenting proposals for the EU’s 2012 budget, aggravating tensions between the two sides.

The Council agreed its final position on the EU’s 2012 budget on Monday (25 July), recommending an increase in total spending compared to this year of just 2.02% – less than half the 4.9% that the Commission has called for. This would mean an EU budget of €129 billion in payments, in contrast to the Commission’s proposal of €132.7bn.

Intensifying the disagreements over the total, the Commission has taken exception to what it describes as “disingenuous” Council offers on administrative spending. The Council is recommending cutting its own spending by 5.45% compared to 2011. These reductions include cutting €10 million from advance payments for the construction of the €240m Europa building (intended to house future European Councils), €9m from delegations’ travel expenses, €8m from interpretation services and €4m from the Council’s contingency reserve.

Clash over cuts

Commission officials say these plans do not amount to genuine cuts, because they affect areas that were under-spent in previous years. And they call the offer of a €10m reduction in future payments for the Europa building “insincere”, since 90% of the building has already been paid for. Council sources have admitted that some of these criticisms are justified, but they continue to argue that the reductions still represent a “tight budget”, with a contingency reserve reduced to only €2m.

Further salt has been rubbed into the wounds by the Council’s recommendation that the Commission’s administrative budget should be cut back by €33m – while the European Parliament’s administrative budget has been left untouched by member states, despite a planned rise from €1.69bn to €1.72bn.

The Commission claims it has already made substantial efforts to economise by freezing its administrative expenditure, and it accuses the Council of being unfair.

The Council decision did not win unanimous support from member states. Austria, Denmark, Finland, the Netherlands, Sweden and the UK all wanted deeper cuts than the 2% proposal drafted by Poland, which holds the rotating presidency of the EU’s Council of Ministers.

? The Polish presidency has proposed 20-21 October as the date for an extraordinary meeting to discuss the 2014-20 multi-annual financial framework. The meeting will bring together all 27 member states, the European Parliament, the European Commission and, for the first time, representatives of national parliaments.