Pressure mounts on three big players to secure negotiating mandate on budget

European leaders last night began official negotiations on the European Union budget. This followed a delay of more than five hours, as political leaders took part in a series of last-minute bilateral meetings ahead of the Brussels summit.

The leaders of the 27-member EU gathered in Brussels yesterday for two days of talks on the multiannual financial framework (MFF) – the seven-year budgetary plan for the union, having failed to reach agreement in November.

The meeting, which had been scheduled to start at 3.30pm, finally commenced shortly before 9 o’clock, Brussels time, following a series of late-afternoon meetings between heads of state.

Taoiseach Enda Kenny was the last to arrive into the summit chamber, having addressed the Dáil in Dublin in the afternoon on the promissory note deal.

British prime minister David Cameron met his Swedish, Dutch and Danish counterparts ahead of the summit, while Mr Cameron briefly met German chancellor Angela Merkel, French president François Hollande and European council president Herman Van Rompuy, according to a senior EU official.

Pressure to secure a negotiating mandate between the three big players intensified yesterday, amid signs of increasing polarisation between France and Britain. David Cameron, under pressure from his Conservative party to secure a cut to the EU budget, called for further cuts to the EU budget.

France is strongly against more cuts. “I realise the need to economise, but we don’t want to weaken the economy,” Mr Hollande said on his way into the summit. “It’s possible to have an accord. If some aren’t being reasonable, I’ll try to reason with them, but only up to a certain point.”

European Council head Herman Van Rompuy had proposed a budget figure of €973 billion in November, before talks collapsed.

€960bn ‘achievable’

This compares to the original European Commission proposal for an overall ceiling of €1,033 billion. Sources indicated last night that a figure of about €960 billion could be achievable. While this figure refers to budget commitments pledged by the EU, Mr Cameron is arguing that a more accurate figure would be the lower budget “payments” figure, which refers to the actual amount spent. This would equate to about €913 billion.

Negotiations are now likely to centre on where the expenditure will be reduced. Spending cuts negotiated for the Common Agricultural Policy (Cap) and structural funds in November – still the EU’s biggest outlays – are not expected to be challenged at this week’s summit. A reduction in the cost of running the European institutions, projected to represent about 6 per cent of the new MFF, is expected to be debated, while expenditure in research and innovation, the portfolio of Irish Commissioner Máire Geoghegan-Quinn, may also be cut.

Irish role

If agreed, the MFF still needs the support of the European Parliament to be passed into law. It falls to Ireland, in its capacity of president of the European Council, to negotiate the passage of the MFF agreement into legislation.

A failure to agree the budget this week could lead to a further delay of several months, putting a range of EU spending programmes on hold.

Negotiations on reform of the Cap, currently under way, also depend on the successful completion of the budget talks.

The Cap still dominates Ireland’s EU receipts, representing about 85 per cent of income from the EU. Ireland received about €900 million in structural funds between 2007 and 2013, and is expected to receive a similar amount between 2014 and 2020.