VIENNA (dpa-AFX) - A two-day European Union summit meeting ended in Brussels on Friday, with leaders of the bloc's twenty-seven member-states failing to reach an agreement on the next seven-year budget.
The European Commission, the executive arm of the European Union, had initially proposed a budget of EUR 1.03 trillion ($1.33 trillion) for 2014-2020, representing a five percent increase over the 2007-2013 budget.
Nevertheless, EU President Herman Van Rompuy submitted new proposals to EU leaders on Friday, including a revised budget of EUR 973 billion ($1.2 trillion). He, however, failed to persuade the main 'contributor' nations to agree to the budget, which was just one percent of the bloc's total economic output.
But the proposal faced stiff opposition from most of the major contributor states with the exception of France. Those nations claimed that they are already under pressure due to internal spending cuts forced by the economic slowdown as well as individual debt crises.
The so-called 'net contributor states' receive less money from the EU when compared to their contributions to the bock. The EU member-states which firmly opposed the proposed budget included Britain, Germany, the Netherlands, and Sweden.
British Prime Minister David Cameron was under tremendous pressure from lawmakers back home to secure real-terms cut in the trillion-euro 2014-2020 EU budget. He had even threatened to use Britain's veto power to block the budget unless it was reduced by at least EUR 50 billion.
Cameron suffered an embarrassing defeat in the Parliament earlier this month after lawmakers from his Conservative Party defied his authority and joined the Opposition in passing an amendment calling for spending cuts in the EU 2014-20 budget.
While Cameron pushed hard at the summit for a budget rebate and deeper spending reductions, France and Poland fought for more farm subsidies and attempted to restore 8 billion euros out of the originally planned 25 billion euros cut on farm spending. Incidentally, France and Poland are the biggest recipients of the EU Common Agricultural Policy, or CAP, subsidies.
After the main 'contributor' nations and the 'beneficiary' countries failed to resolve their differences over the budget even after two days of debate, European Council President decided Friday to postpone the negotiations to a later date. They are now expected to resume early next year.
British PM Cameron told reporters later that several other nations had joined the UK in opposing the proposed EU budget, saying: 'Together, we had a very clear message: 'We are not going to be tough on budgets at home just to come here and sign up to big increases in European spending'.'
'But we still believe a deal is absolutely do-able. Freezing budget is not an extreme position,' Cameron stressed. He added that the summit had failed to reach an agreement because the proposed budget was 'just not good enough'.
Meanwhile, German Chancellor noted the different views expressed at the summit by different EU nations, and said: 'The discussions, both the bilateral discussions and the common discussion, have shown us that there is sufficient potential for an agreement.'
While European Commission chief Jose Manuel Barroso blamed the failure of the talks on 'important differences of opinion - especially in overall size of the budget,' Lithuanian President Dalia Grybauskaite said the atmosphere at the summit had been 'surprisingly good because the divergence in opinions was so large that there was nothing to argue about.'
Failure to strike a deal at the summit has dented the region's image, particularly because most of the meetings since the onset of the debt crisis have proved to be a stage only for exposing the deepening divide among Europeans on policies and reforms.
The two-day EU summit began just two days after eurozone finance ministers failed to strike a deal on Greece, delaying further the approval of the much-awaited 31.5 billion euro loan installment despite fears that the country will face a sovereign default.
The marathon talks in Brussels on Tuesday failed to take a final decision on the next Greek aid tranche. The resolution of a dispute with the International Monetary Fund on a two-year extension of the Greek bailout program as well as on closing the funding gap of around 32.6 billion euros created by the extension also remained elusive.
Copyright RTT News/dpa-AFX
© 2012 AFX News
