Monday, November 19, 2012

The long queue of potential 'EU budget vetoes': Who will join next?

Update 21 November, 16:15

Portugal has stepped up its rhetoric by a notch, and has now joined the group of countries that have explicitly threatened to use their veto. Portuguese Prime Minister Pedro Passos Coelho told MPs, "The proposal that has been tabled [by European Council President Herman Van Rompuy] is completely unacceptable for Portugal. By saying this, I mean that I would block a decision [by EU heads of state and government] that had this proposal as its final result."

In practice, this means that one third of EU member states have so far explicitly said that they are ready to veto the next long-term EU budget.  

Update 21 November, 10:40

Another day, another EU budget veto threat - this time from Latvia. Prime Minister Valdis Dombrovskis has said that his country is prepared to veto the 2014-2020 EU budget unless it gets a better deal on agricultural subsidies and cohesion policy.

Update 20 November, 17:00

Italy has today officially moved to the group of countries that have explicitly threatened to veto the 2014-2020 EU budget. Italian Europe Minister Enzo Moavero Milanesi said Italy will be "ready to use its veto" if it considers that the next long-term EU budget is "harmful for the country and burdensome for the Italian taxpayer."

Also, Portugal added its voice to the group of member states that consider Van Rompuy's proposal "unacceptable", but stopped short of threatening a veto. 
 
And here's our original blog post,

You will have read a slew of stories about how the UK is threatening to veto the EU leaders' budget talks later this week and the various terrible consequences that will follow should it do so. The FT has a story today that EU diplomats are working to "circumvent" the UK's veto by moving to annual Qualified Majority Voting, which actually only means that they're working on a scenario for a roll-over, should a deal fail to be struck (we've already looked at that scenario in detail here) so don't get too excited.    
As some European sources have put it, a "miracle" would be needed to strike a deal on the 2014-2020 EU budget when EU leaders meet in Brussels on Thursday and Friday. And the UK is certainly not alone when it comes to putting its veto on the table. In fact, veto threats are flying around all over the place - we count seven veto threats in total. Here is a list of EU member states who have either explicitly threatened to veto the next long-term EU budget or said they are unhappy with the compromise currently on the table - which means they could wield their veto unless something changes.

UK: Has threatened to veto any proposal which does not involve, at worst, a freeze based on 2011 payments.

Denmark: Has warned it will use its veto unless it gets a rebate worth 1 billion DKK (slightly over £100 million) from the 2014-2020 EU budget.

France: Has said the compromise proposal put forward by European Council President Herman Van Rompuy "is not a basis for negotiations". Paris wants EU farm subsidies to be kept at least at 2013 levels, and said it will threaten to veto the talks should CAP spending be radically changed.

Sweden: Has hinted at using the veto in the past and believes Van Rompuy's proposal still does not go far enough. According to Swedish Europe Minister Birgitta Ohlsson, what is missing is "a clear model for reducing agriculture subsidies".

Austria: Has threatened to veto the long-term EU budget unless two conditions are satisfied. Firstly, Austria wants to continue receiving its 'rebate on the UK rebate' over the next seven-year EU budget period. Secondly, the Austrian government is opposed to cutting the rural development component of the CAP.

The Netherlands: Does not want to see the annual or long-term EU budget increase above inflation, and explicitly said it will use its veto if necessary.

Romania: Has warned it could use its veto, calling Van Rompuy's proposed cuts to farm subsidies and regional funds "unacceptable".

Italy: Has not threatened to veto the talks but dismissed Van Rompuy's compromise, saying it is "not a positive contribution" to the negotiations. Italy wants to see its net contribution to the EU budget cut, the reason being that its GDP per capita has now slipped slightly below the EU-27 average. Rome also opposes cuts to farm subsidies and cohesion policy.

Spain: Has rejected Van Rompuy's proposal as "unacceptable". Reports have suggested that, under the proposal, Spain risks losing up to €20 billion in total over seven years in both farm subsidies and cohesion funds. However, Madrid is still to drop the "V" word.

Poland: Has not explicitly threatened to wield its veto, but is clearly not happy with Van Rompuy's proposed cuts to EU regional spending. Poland is trying to muster support from other net recipients from the EU budget, such as Portugal - the so-called 'Friends of cohesion group'.

So, it looks like circumventing a veto on the 2014-2020 EU budget would mean much more than circumventing the UK.

8 comments:

Rik said...

The nice thing about the EU looking at circumventing the UK is that it gives a good reason to start blocking new policies.
That is why it is also a good strategy to bring up CAP (including the EU not meeting the conditions for Blair's reduction of the UK rebate) and the regional fund and the R&D subsidies possibly used to keep outdated French carmanufacturers alive. Makes the effort more sympathetic and gives possibilites to block more credibly new EU policies.

Anyway getting in the media with the 'around the UK strategy' is again the Commission shooting itself in the foot (probably not much foot left, more likely to hit one of the previous bullets still there).

Nice to see as well that a change in decisionmaking culture seems to have arrived. Consensus and compromise seems to be something of yesterday.

Jesper said...

Apologies for going a bit off topic but:

I believe you might have someone who can read Swedish?
Link to a EU-committee discussion in Sweden:
http://www.riksdagen.se/sv/Dokument-Lagar/Utskottens-dokument/EU-namndens-stenografiska-uppteckningar/Fredagen-den-26-oktober-2012_H00A7/

My reading of the discussion indicates what appears to be a strange way of working. Apparently the test if subsidiarity principle should apply is only done AFTER a finished proposal/negotiation in Brussels. Wouldn't it make more sense and save work if the test was done before all the work was done?

I like this part:
"Anf. 24 LARS OHLY (V):

Ibland verkar byråkratin ha som främsta uppgift att ***** med folk. Det finns delar i det här förslaget som jag menar bara gör livet surare för människor som det inte finns någon anledning att jaga."

No need to let the post go through the moderation but I wouldn't mind if you wrote a piece about it ;-)

Agincourt said...

Excellent! It's all falling apart for the evil EU! Maybe a BritExit isn't so far away, after all!

Rollo said...

I do like this article. All is well when everything is going well and anyone can borrow as much as they like as cheaply as they like. Then the reckoning has to come: who is going to pay? The French are the problem: thay want to be paid more, yet they cannot themselves afford to pay their share. I always wanted to get out before the whole edifice crashed; we may be too late.

Bugsy said...

I see that the move to a Federal Europe, all pulling together etc is going swimmingly.

When the chips are down the true feelings of every country are laid bare.

Time we followed the bear and exited stage left.

Denis Cooper said...

In your October 30th article you say:

"If EU leaders fail to reach a deal before the end of next year, the 2013 budget ceilings are carried over, adjusted to the standard GDP deflator (i.e. a 2% increase to account for inflation)."

and refer to a 2006 InterInstitutional Agreement:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2006:139:0001:0001:EN:PDF

I would suggest that this 2006 Agreement is not actually part of EU law - one clue to that is the note "(Information)" at the head of the document, and another clue is that it cites no legal base in the EU treaties, which makes sense because in 2006 there was no legal base for it in the EU treaties - and therefore unless UK government lawyers can come up with solid arguments that this is a valid treaty obligation British MPs should have no compunction about refusing to authorise increased payments.

Rik said...

@Denis
1. It could however be seen as another sort of international agreement (the non-EU kind).
But also as you indicated something that is simply not EU law.
In case of doubt take the one that suits you best. Until a court decides otherway or giving it up gives something even bigger in return.
2. Anyway closing the money tap usually is a good strategy. People in general get much more realistic when they donot have funds.
In that respect the EU going along with a 25-26 budget would have been great as well.
3. Thinking this will all be settled in a friendly atmosphere is totally unrealistc imho. Cameron will probably have to go in with 2 stretched legs at some part of the game (or bite a piece from someone's ear. May I suggest Barosso's or Ashton's).
Same as many European experts think that this will run according to the same procedure as before. Possibly but not necessarily. This might go differently. Like writing off Greek loans and still keep helping them, increasing EU budgets (and keep CAP and effectively EU's own 3rd world transfer at the same level) will be hard to digest in many countries. With the Euro crisis that warm EU feeling has already gone largely out of the window.

Denis Cooper said...

Rik,

The first point is that British MPs have expressly approved the EU treaties, and by implication for good or for ill - mostly for ill - they have agreed to accept anything which legitimately springs from those EU treaties.

So, for example, if under the agreed EU treaties a certain Directive may be made on the basis of a majority vote in the EU, then British MPs have by implication accepted that this could happen and it could be held that they must respect that as an obligation arising under the EU treaties that they, or their predecessors, could have rejected but instead approved.

But as the 2006 InterInstitutional Agreement appears to have had no basis in the EU treaties in force at that time then it can and should be argued that British MPs are under no similar obligation to respect it as an obligation arising under the EU treaties that they, or their predecessors, could have rejected but instead approved.

I have sought an answer to the question of whether British MPs were ever asked to approve that 2006 InterInstitutional Agreement, and nobody has provided a reference to a measure passed to approve it and nor can I find one.

The second point is that even if British MPs did at some point vote to approve the 2006 Agreement, Parliament remains sovereign, and within Parliament the House of Commons has long had undisputed control of the public purse, and it would be open to British MPs to refuse to adhere to the terms of that 2006 Agreement in the light of the greatly changed circumstances.