The Spanish EU Presidency does not specifically mention the comprehensive review of the EU budget in its programme, but the subject could end up on the table in the coming months.

The draft conclusions of the December 2009 European Council invited the Commission to come forward with proposals “at the latest by July”, with a reference to the December 2005 mandate (see box). In the end, leaders deleted this paragraph, possibly because some had misgivings. One senior diplomat commented: “The proposals for the next financial perspectives will be presented in 2011. Does it still make sense to proceed with this budget review in 2010?”

Commission President José Manuel Barroso nevertheless seems ready to launch the reform. He will probably wait for member states to endorse, in March, the new 2020 strategy for growth and jobs and to wrap up, in April, talks on the External Action Service, since all these issues will be connected. It remains to be seen whether the Commission will simply present a guidance document or whether it will start a real overhaul of the Union’s finances, calling for an increase in credits for tomorrow’s policies, notably combating climate change and stimulating growth, employment and research, while opening tough debates on reform of the common agricultural policy or abolition of Britain’s rebate.

The debate is highly sensitive. A leaked document proposing financial cuts for the Common Agricultural Policy and cohesion policy created an uproar (see Europolitics3842), despite the Commission’s response that this was simply a draft that would be thoroughly reworked. The reform will be overseen by Barroso, but the future Budget Commissioner, Janusz Lewandowski (Poland), will also be involved. Poland is the second largest beneficiary of structural funds and a main recipient of agricultural funds, so it is highly likely that its representative will not want to sacrifice these two policies.

Debate postponed time and again

In December 2005, once negotiations on the financial framework for 2007-2013 had been concluded, the European Council gave the Commission a mandate to “undertake a full review of all aspects of the Community budget (income and expenditure), including the common agricultural policy and the British rebate, and to report in 2008-2009”. In September 2007, the executive launched a public consultation, but to prevent any interference with ratification of the Lisbon Treaty, it decided to wait until November 2008 to publish the results. The financial crisis had just struck Europe, so the debate was again postponed. Most recently, in November 2009, Barroso decided to wait until the new Commission was in office before presenting any proposals.