The European Parliament won its case for the creation of a legal basis for the EU’s €60 billion borrowing capacity established in the financial stabilisation fund of €750 billion, during the three-way budget talks, on 30 June in Brussels.

Discussions at this meeting of the European Commission, Council and Parliament focused mainly on the 2011 budget. The outgoing Spanish EU Presidency presented the position adopted the day before by the Budget Committee, which will be endorsed by the Ecofin Council, on 13 July. The position provides for cutting the payment and commitment appropriations proposed by the EU executive in its 2011 draft budget due to the economic crisis and strong pressure on national budgets. The increases over the 2010 amounts would be limited to 2,91% and 0.22%, respectively, rather than 5.9% and 2.2% (see Europolitics 4010).

The EP delegation pointed out that its priorities were the funding of the 2020 strategy, the External Action Service, Subheading 1a (competitiveness) and youth programmes. MEPs also seek a revision of the financial framework 2007-2013 to raise the ceiling and enable the EU to respond to new challenges. They also ask to be informed on the €750 billion financial stabilisation mechanism adopted by the member states, on 9 May, which entitles the Commission to borrow €60 billion using the EU budget as a guarantee. On the latter point, the EP succeeded in adding an amendment to one of the draft 2010 amending budgets on the table (the one concerning OLAF) introducing a special budget line, and therefore a legal basis, for this borrowing capacity, which remains a first. It wants to be sure that this amount cannot be released without its assent.

On revision of the existing financial framework, the two branches of the budgetary authority did not go into detail on the negotiations, which are likely to be tough since the question remains a priority for MEPs but does not seem to be on the Council’s agenda. The three institutions also discussed the External Action Service, for which funding of €9.5 million is planned for 2011. Parliament would like to take advantage of a possible increase in the ceiling of the financial framework to raise this amount. The Council has not given its view at this stage.

CONCILIATION COMMITTEE

The parties to the three-way talks also agreed on the functioning of the conciliation committee under the new Lisbon rules (which give the EP and the Council only a single reading of the budget). They also confirmed that another round of talks would be held on 11 October, shortly before Parliament’s reading at its plenary of 18-22 October. The conciliation committee will then meet on 26 October and will have 21 days to reach an agreement on the 2011 budget.