Battered EU budget in for painful bargaining

BRUSSELS - Agence France-Presse

AFP photo

The collapse of EU talks on Nov. 23 without agreeing a seven-year budget is not calamitous, the bloc will continue to function, but it does heap yet more pressure on a divided European Union mired in an intractable debt crisis.

“The psychodrama will play in two acts,” wrote Belgium’s Le Soir newspaper in the wake of the collapse of the two days of summit talks in Brussels, with a second round of negotiations now needed next year after the EU leaders “shot themselves in the budget.”

“It’s depressing,” said Le Libre Belgique. The failed talks “prolongs an already long list of misses, blockages, retreats, and other avowed European failures.”.

The leaders of the EU’s 27 member nations predictably beg to differ.

There’s “no need to dramatize” the delay, said EU President Herman Van Rompuy as the leaders broke off the talks without reaching a deal. “These budget negotiations are so complex they generally take two goes.”

“I’ve always said that it is not dramatic if we take only as a first step today,” German Chancellor Angela Merkel said as the talks neared breakdown late on Nov. 22. “If we need a second round, then (we must) devote the time to it,” she added.

But the bickering that killed budget talks came only days after Eurogroup finance ministers failed to agree a compromise on releasing crucial funds to Greece, which is desperate to receive a 31-billion-euro aid slice held up amid feuding by eurozone creditors and the IMF. Those ministers will go back to the drawing board Monday in yet another shot at solving the crisis in Athens.

A collapse of the broader budget talks is bad for the EU image, a European diplomatic source told AFP just before the talks ended, while former Prime Minister of Belgium Guy Verhofstadt warned a breakdown in budget talks “would send a bad signal.” Long before the debt crisis, agreeing an EU budget was no easy task.

It became so tricky that in the 1980’s leaders agreed to pool negotiations into multi-year deals to avoid the pain of annual meets.

The budget talks for 2014-2020, which many had forecast would last deep into the weekend, instead ended Friday after leaders of richer nations to the north, led by Britain, insisted the EU push through deep budget cuts to match sacrifices made by austerity-hit citizens back home.

But have-not nations to the south and east, led by Poland and Portugal, insisted that cherished cohesion funds -- that pay for major projects like highways and infrastructure -- remain crucial, especially in a time of recession and crisis. France and Italy meanwhile defended the EU’s massive farm subsidies, the budget’s most expensive item. “The European spirit can have its feet and body stuck in national politics,” opined Belgian Prime Minister Elio Di Rupo to La Libre Belgique.