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Member states and MEPs strike compromise on long-term EU budget; Commission tables historic cut to the EU’s annual budget for 2014

27 Jun 2013

Reuters reports that at a meeting this morning between the Irish Presidency and the European Parliament’s negotiating team, a compromise was struck over the EU’s long term budget agreed by David Cameron and other EU leaders in February, which MEPs had been threatening to veto. The details of the agreement remain unclear, however. Meanwhile the Commission yesterday tabled its proposed annual budget for 2014, the first drawn up using the new reduced expenditure limits.The budget sees €142bn in new spending commitments and €135.9bn in actual payments, a cut of 6% and 5.8% respectively.  

Writing on the Spectator’s Coffee House blog, Open Europe’s Pawel Swidlicki argues that the good news for David Cameron is that this cut “shows that things in Europe don’t always have to move in the same direction”, but the bad news is that “the cut exist because the 2013 EU budget has been retroactively increased”. Pawel was also quoted in the Mail questioning the decision to cut the budget of the Court of Auditors, an institution tasked with scrutinising EU spending.
Open Europe blog Mail Spectator Coffee House: Swidlicki Reuters

Bank bail-in rules agreed as UK dodges burden of pre-funded resolution scheme
After seven hours of talks last night, eurozone finance ministers agreed on the new set of bank bail-in rules (under the Recovery and Resolution Directive). The final agreement allows for some flexibility with governments or the eurozone bailout fund allowed to inject funds but only after minimum bail-in of 8% of the total liabilities of the failing bank – although such intervention is capped at 5% of the bank’s liabilities. The UK and non-eurozone countries also secured caveats which essentially allow them to avoid building up pre-funded resolution funds. The agreement sees the bail-in plans coming into force in 2018, while the directive as a whole till needs approval from the European Parliament, so it could yet change.
Open Europe blog Council of Ministers press release Reuters FT WSJ FAZ Süddeutsche Spiegel Reuters Deutschland Handelsblatt Presse Irish Times European Voice Euractiv Welt El País Expansión La Stampa blogs: Zatterin La Tribune  

FAZ’s EU and NATO correspondent Nikolas Busse writes that “European problems cannot best be solved by ‘more Europe’ anymore,” adding that “nothing has come so far” of the call for “political union” to deal with the continent’s sovereign debt crisis.
FAZ: Busse  

The FT reports that following complaints from German car manufacturers about the EU’s new rules on vehicle emissions, German Chancellor Angela Merkel has lobbied Irish Prime Minister Enda Kenny – who holds the EU’s rotating presidency - to request that the matter be dropped from the agenda of this week’s summit of EU leaders.
FT Süddeutsche

Osborne announces new ‘EU-proof’ welfare curbs
In his spending review, George Osborne announced that those living in European countries that are warmer than anywhere in Britain will be prevented from claiming winter fuel payments. The Mail notes that the move will prevent an estimated 150,000 from receiving the money from 2016 – many of whom became eligible because of an EU court judgement. In addition, people without adequate English to gain employment will attend compulsory language classes to get welfare payments, Mr Osborne said. Officials last night insisted the plans were “legally compliant” to avoid any challenges from the EU, the Express reports.
Open Europe research: EU free movement and welfare Mail Express

Negotiators from EU member states and the European Parliament yesterday approved a raft of changes to the CAP including limiting subsidies to larger farms, abolishing sugar quotas by 2017, mandatory aid for young farmers, and introducing more environmental conditionality. Open Europe’s Pieter Cleppe is quoted by Deutsche Wirtschaftsnachrichten criticising the agreement as not going far enough to reduce direct subsidies to farmers, which act as a disincentive for modernisation.
Open Europe research: CAP reform EUobserver FT Irish Times European Voice Euractiv BBC Irish Independent DWN

In an interview with Les Echos, European Commission President José Manuel Barroso said, “If we have to go towards more integration in the monetary union, I will be the first to agree with having less [integration] in other domains. It is not about listing sectors, that would be counterproductive and generate divisions. But we can reduce our regulatory activity, which is sometimes perceived as too intrusive.”
Les Echos: Barroso Le Figaro

FAZ reports that the European Commission has softened its call on France to raise the national retirement age in the draft conclusions of the European Summit.
No link

Speaking at the Bundestag on Thursday, German Chancellor Angela Merkel said that that a eurozone solidarity fund would be “conceivable” if eurozone states could agree on the content and substance of closer economic coordination.
Reuters Deutschland FAZ

At today’s EU summit, David Cameron is expected to argue that loosening labour market rules and freeing up small and medium companies to take on young staff should be EU leaders’ priority.
Euractiv Euractiv 2 BBC Express Reuters Deutschland Süddeutsche

Following a Gallup poll showing that 39% of Dutch citizens favour leaving the EU, Dutch Foreign Minister Frans Timmermans has said that it is not possible to restore trust citizens’ trust in the EU without reform.
ND Telegraaf

In reaction to the Anglo Irish scandal German CDU MP Michael Fuchs told RTE yesterday, "We are offended. If you have a feeding hand you shouldn't bite into it." One of the leaked tapes showed Anglo Irish employees seemingly mocking German concerns over the bank bailout.
Irish Times Irish Independent Irish Independent 2 Guardian

After pulling out of Greece’s ruling coalition last week, Democratic Left has said it would offer the Greek government its support on a case-by-case basis in future.
Kathimerini Kathimerini 2  

Reuters reports that China will impose anti-dumping duties on a chemical dye imported from the EU imposing 19.6 % on production from Germany and 36.9% from other EU states.

The FT reports that a number of US ‘Buy America’ laws will complicate US-EU trade talks.

Portugal’s centre-right government today faces the fourth general strike since it took office two years ago, Jornal de Negócios reports.
Jornal de Negócios El País 

Spanish Budget Minister Cristóbal Montoro will today meet representatives from Spain’s regional governments to fix the regions’ deficit target for this year.

In an interview with German daily Tagesspiegel, Cypriot Central Bank Governor Panicos Demetriades said that Laiki Bank, once the island’s second largest bank, was deliberately kept afloat by the ECB in order to protect foreign investors.
Cyprus Mail  

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