EU begins tough 2013 budget talks

Agence France-Presse

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Senior European officials go into tough talks on the EU's 2013 budget, hoping for an accord which could help pave the way for agreement on the bloc's even more hotly disputed 2014-20 spending plans

BRUSSELS, Belgium – Senior European officials went into tough talks Friday, November 9 on the EU’s 2013 budget, hoping for an accord which could help pave the way for agreement on the bloc’s even more hotly disputed 2014-20 spending plans.

The negotiations could be prolonged, with no guarantee they will produce a working compromise as major net contributors, led by Britain, seek sharp cuts at a time when governments are having to reduce spending and impose austerity.

The European Commission and Parliament meanwhile are sticking to their guns, seeking a 6.8 percent increase to 138 billion euros for 2013 in order to bolster growth and jobs in a sharply slowing European economy.

“EU budget 2013 meeting starts: 10.00 am. Negotiations end: hopefully today? EU Commission want 6.8% increase. UK & others opposed,” Britain’s EU office tweeted as the talks began.

Cyprus, the current holder of the EU’s six-month rotating presidency and so in the chair for the talks, warned that “today we’ll have a long day and possibly a long night.”

The stakes are high, given the impact failure could have on the 2014-20 negotiations in the run up to a crunch November 22-23 summit on that budget, Cyprus’s Andreas Mavroyanis said as he went into the talks.

“If we succeed in these negotiations, we’ll create a better atmosphere for … the negotiations on the multi-annual budget, a very important step forward,” Mavroyanis said.

“If not, this will poison the atmosphere — but let’s go for the better” option, he added.

France, Finland and Germany want the 2013 budget to be cut by 5.0 billion euros while London has suggested even more, stressing the need for austerity.

The Commission, the EU’s executive arm, argues this will seriously undercut any chance for economic growth, making worse the very problems such countries say must be fixed through more belt-tightening.

Earlier this week, the Commission slashed its economic forecasts for both the 27 member EU and 17-nation eurozone, highlighting how the debt crisis has undermined growth and sent jobless rates soaring.

“Europe is going through a difficult process of macro-economic rebalancing, which will still last for some time,” EU Economic Affairs Commissioner Olli Rehn said, insisting on the need for continued austerity to stabilise public finances.

Last month, British Prime Minister David Cameron threatened to veto the 2014-20 budget at the November 22-23 summit if Brussels insisted on an increase of 5% to around 1.0 trillion euros.

Since then there have been signs of some readiness to compromise slightly but no member state appears willing to concede too much at this stage, holding fire to see who will blink first.

If there is no agreement on the 2013 budget, the EU would base its spending for next on the 2012 programme, rolled over on a monthly basis. – Agence France-Presse

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