Money, money, money: EU multiannual budget negotiations heating up

"Money, money, money," sings the Swedish pop group ABBA in its famous 1970s pop song, and it is also the key issue in Brussels in view of the negotiations on the EU's post-2013 budget. However, with the negotiations on the next multi-annual budget - or MFF (Multiannual Financial Framework) - for the European Union entering the hot phase, there is justified concern that the money needed will not be made available.

Member States to EU: Do more with less money

In the negotiations to determine the maximum amount of money the EU can spend on individual projects between 2014 and 2020, EU Member States have been asking the impossible. Having charged the EU with additional tasks and commitments in recent years such as an investment increase for research and development to attain the EU2020 funding objective of 3% of EU GNI, additional efforts to achieve 0.7% EU GDP for Official Development Assistance, border control support in the framework of the FRONTEX agency or the establishment of the EU's external action service, not to mention large-scale projects such as the experimental ITER nuclear fusion reactor, some of them are now refusing to make enough money available to finance these obligations.

The European Commission, faced with the unenviable task of putting on the table a first draft reconciling additional demands for spending and calls for cutting the EU budget at the same time, proposed to finance some Member States' demands outside the general EU budget structure, transgressing the principle of the unity of the budget and making EU funding, that most EU citizens even now fail to understand, even more non-transparent.

"So I must leave, I have to go, to Las Vegas or Monaco, and win a fortune in a game," ABBA sings, faced with a shortage of funds to finance their needs. Gambling of course is hardly an option for EU policy-makers who are now faced with the challenge of reconciling the adverse camps of the 'friends of better spending' and the 'friends of cohesion' inside the Council.

EU to Member States: Put your money where your mouth is

"All the things I could do, if I had a little money," the song continues. It is therefore up to EU Member States to provide the additional funds matching their requests - or say openly where to cut the budget in order to bring figures into line with spending demands. The European Parliament's negotiating position, tabled by EPP Group Member Reimer Böge and adopted in October, therefore calls on EU Member States to return to responsible budgeting where the money matches demands.

Unfortunately negotiations on the 2013 Budget failed before they started over a dispute on paying unpaid bills for which there is no money left in the 2012 Budget. These are bills of almost €9 billion, presented by authorities in the Member States that manage EU funds, for commitments already made and for which the Commission warned there would not be enough money when the Budget for 2012 was cut.

This does not bode well for negotiations on spending for 2014 to 2020.

What happens now?

Negotiations on the MFF will reach a crucial point when the EU Council adopts a position at its next summit on 22 and 23 November. Parliament and Council should reach agreement on the long-term budget by the end of the year to allow for its adoption and entry-into-force by 2014.

Just like the rich man's life in the ABBA song remains an illusion, the danger is that EU Member States build up expectations they themselves refuse to match with real money. The European Parliament, which will have to approve the final proposal, will see that taxpayers' expectations and financial necessities, rather than fancy wishes, will be brought back as the guiding principle in the negotiations.