Countdown to a budget deal

Tough talks ahead as MEPs and EU states seek to bridge budget gap.

MEPs and member countries meet for talks on the EU’s 2016 budget on Friday, hoping to bridge a gap between their positions of more than €4 billion.

The two sides have until November 18 to strike a deal. If they fail, it’s back to the drawing board with the European Commission asked to draw up a new proposal as the basis for negotiations.

Europe’s migration crisis has become a controversial issue in the talks. The EU has drawn up grand plans at a series of summits on migration this year; plans that they will have to pay for.

Every year, the EU puts aside money from cartel fines and custom duties, and uses it to reduce the contributions that member countries have to make to the EU budget. That amounts to €2.3 billion this year and MEPs on Wednesday called on member countries to earmark that cash for helping refugees from Syria and Africa.

That money “would enable us to build a better future in those countries and prevent wars,” said Portuguese conservative José Manuel Fernandes, one of the MEPs leading the budget talks.

But there is no guarantee that member countries will follow the Parliament’s advice. “We took notes of the Parliament’s claim,” said a diplomat from Luxembourg, which holds the rotating presidency of the Council of Ministers, adding that transferring that money directly to helping refugees is not possible under EU budget rules.

The Council is playing hardball on the budget, at least in part because of frustration that the Parliament is not doing enough to cut staff. All EU institutions agreed in 2013 to reduce staff numbers by 5 percent by 2017, but the Parliament intends to increase the number of civil servants and contractors by 5.4 percent.

The Parliament is cutting staff in its secretariats, but is increasing the number of political advisers and staffers working for the political groups — almost all of whom are paid out of the Parliament’s budget. The decision to increase staff numbers was backed by the two largest groups, the European People’s Party and the Socialists and Democrats.

Another strain on finances is the Parliament’s newest group, the far-right Europe of Nations and Freedom, which took €3 million from the coffers.

The “obsession of MEPs to increase staff weakens their position [in the budget talks],” said a diplomatic source.

There is a vast gulf between the two sides over the size of the budget — a gap of €4.2 billion. The total budget will be in the region of  €145 billion.

Another split is over the so-called Juncker Plan — officially the European Fund for Strategic Investments — which aims to raise €315 billion in mostly private sector cash over the next three years to boost projects in energy, infrastructure, research and technology.

To attract private investors, part of that money is to be diverted from planned research and infrastructure projects. Although MEPs reluctantly approved the idea in June, the official position of the Parliament is to restore the money to its original position.

This article was updated to correct the nationality of MEP José Manuel Fernandes, who is Portuguese.