At the end of it all, a deal was done. But it was always going to.
But seldom have so many working hours been wasted to achieve so little as the EU’s interminable budget negotiations. Spare a thought for the MEPs and their staff. not forgetting the numerous civil servants with the misfortunate of having to sit through weeks and months of futile trilogues.
Little wonder that politicians and reporters have been complaining of ‘budget fatigue’ for months.
The EU’s budgetary system verges on the farcical. National governments agree on the projects and provide the money to pay for them, while the commission administers them. Around 20 percent of the EU’s funds are raised through VAT and customs and excise duties, while most of the remaining 80 percent comes in the form of direct payments from national governments.
Largely as a result of this, the commission has complained of being ‘under-resourced’ for years. Last year, the commission ran out of money in October and was forced to ask governments for more money to cover bills for the Erasmus exchange programme and the European Social Fund. They also rolled over as many payments as possible into 2014. Governments then insisted on a 2013 budget without sufficient funds. So it was entirely predictable that the commission would run out of money in 2013, just as it had done in autumn 2012.
And that’s what happened. The commission has tabled nine separate amending budgets during the course of this year worth a combined total of €16 billion, meaning that the €150.9 billion settlement agreed this time last year ended up leaving a shortfall of more than 10 percent.
During the October plenary session in Strasbourg, a number of MEPs were making dark threats about the EU having its own version of the US ‘debt ceiling’ debate. But the main similarity was that the episode is thoroughly embarrassing for all concerned. Unlike in the US where a government shutdown means precisely that – with public sector workers being either shut out of their offices or working for free – the EU’s so-called ‘thirteenth month’ rule comes into play if an annual budget can not be agreed. In other words, spending levels from December of the preceding year are rolled over to the next, after being adjusted for inflation. There was never any prospect of an EU shutdown.
The endless shenanigans do not portray any of the players in a good light. The Council for refusing to hand over the money that will allow projects to which they had already agreed to be paid for; the Commission for making a series of seemingly unlimited requests; the Parliament for always demanding more money and doing too little to trim its own bloated spending;
Total EU spending for 2014-2020 is a fraction under €960 billion – a tidy sum, but one which works out at under €140 billion per year – smack on 1 percent of GDP. In the wider context of government spending in Europe, it is not very much. For example, statistics revealed today showed that EU governments spend 29 percent of GDP on social protection.
The problem is that, with the seven-year spending plans finally agreed, and an election in six months time, the urgency for reforming the budgetary process will probably disappear. With the proposed financial transactions tax stuck in the legal long-grass and no other real ideas for alternative income The commission is almost certain to get out the begging bowl this time next year.
Even so, there must be a better way of doing this. Much more of this nonsense and the EU’s budgetary process will become another stick for eurosceptics to beat them with – and, in this case, entirely self-created.