EU budget mired: Council to re-convene in the New Year

The special European Council on the MFF ended in deadlock on 23 November. After a round of bilaterals with the Heads of Government on Thursday 22/11 Council President Herman van Rompuy tabled a new Negotiating Box which maintained the €81b cut in the overall MFF (7.4%) which had failed to impress the net contributors ten days earlier. In an attempt to calm the friends of cohesion and of the CAP he is offering smaller cuts in these two headings than in his 13/11 paper. Certain net payers (Germany UK, Netherlands and Sweden) still want another €20b to €50b overall budget cut. The new Member States are not happy with the proposed cohesion funds, and the French want an even smaller cut in the CAP funding. No single country was blamed for the Council failure; most explained it away saying that the budget always takes at least two attempts.

Focussing on the CAP. The Cypriots suggested that the CAP should shoulder €11b of their proposed €50b cut in the overall budget, ie about a 3% cut. Van Rompuy initially suggested doubling this to a €22b cut. However this drew a strong reaction from France, supported by Italy, Spain and Ireland, so he offered €8b back, leaving a 4.5% cut on the Commission proposals. These cuts to Heading 2 are not shared proportionately between the two CAP Pillars. The Commission proposed keeping the shares of total CAP funds allocated to the two Pillars more or less constant at their current levels (72% & 28% for P1 & P2). The Cypriot proposal protected Rural Development. Van Rompuy initially suggested Pillar 1 be cut 5.8% and Pillar 2 cut 9%. In his latest proposal he reduced the cut in Pillar 1 to 3%, but left the Pillar 2 cut unchanged. He also trimmed a little from Fisheries and LIFE. No reactions to this imbalance were reported from the Council, only from environmentalists.

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26 Nov 2012