European Parliament rejects proposed European MFF budget – negotiations begin

EU flagsBrussels, 13/01/2013. The European Parliament today rejected the future budgetary framework proposal (the Multi-annual Financial Framework or MFF) reached by EU national ministers at their summit on 8th February. In today’s vote, a majority (506 in favour, 161 against, 23 abstentions) of MEPs supported several key demands which will be the focus of future negotiations.

For the ALDE group, ex-Belgian PM Guy Verhofstadt suumarised their position:

“The European Council preserved the existing structure of the MFF, with only 13% for research, innovation, infrastructure and competitiveness. Only one billion euros over seven years, instead of the nine billion foreseen, has been set aside for the rollout of broadband internet connectivity across the whole EU. That is just not serious. We want to rebalance the budget towards future priorities.”

“Nor can we countenance the creation of excessive deficits, building up outstanding commitments year on year to a potential debt of 300 billion by 2020, if all commitments are taken up. It is ironic that member states are being required by the European Commission to reduce their annual budget deficits whilst they, in turn, are obliging the EU to increase its own deficit. To deal with that problem we need more flexibility between budgetary lines and carry-over between years so that under-utilised funds can be redirected to where the money is most needed.”

Separately, he also pointed to the urgency driving the negotiations, saying, “According to the Commission’s own data, in the eurozone at present seven countries are in recession, nine are in stagnation. Eight countries have more than 10% unemployment and in two Member States, Spain and Greece, it is more than twice as high. On public deficit and debt, all countries are breaching the rules of the stability pact. Only two small countries, Estonia and Luxembourg, do not.”

“But it is not only a question of figures. The depressing economic outlook is giving rise to populist and far right movements across the EU and declining support for the European Union.”

“This Spring Council should develop a vision for a more holistic strategy that combines discipline and solidarity. We cannot afford to abandon fiscal discipline, as some may wish, but nor can we afford to ignore the need to develop a second track based on investment and debt mutualisation. If Italy could reduce its current interest payments by 1% it would save €20 billion for productive investments”.


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