The FINANCIAL — EU leaders may think they have settled the bloc's 2014-20 budget but it is the European Parliament, angry at the first ever cut, that now has the final say and early signs point to tough talks ahead.
Stung by the agreed three percent reduction in EU spending over the next seven years, parliamentary leaders were quick Friday to reject the hard-won deal, saying it would undermine Europe's future and could even be illegal if it resulted in Brussels running a budget deficit.
As EUbusiness said, under the core 2009 Lisbon Treaty, parliament is now a party to the EU budget process, with lawmakers required to sign off on the figures EU leaders agree.
In the heat of the moment, however, that aspect tends to get overlooked and the tone of the press commentary Saturday too was very much as if the deal had been done and that was it.
But Parliament has to vote on the 2014-20 budget in July and significantly, EU President Herman Van Rompuy was careful when he announced the accord after marathon talks Thursday and Friday to note that the hard-won deal still needed lawmakers' approval.
It was "perhaps nobody's perfect budget," Van Rompuy conceded, but "there is a lot in it for everybody" and he urged MEPs to do their duty towards Europe.
The budget was not "an accounting exercise" and before rejecting it, lawmakers should think "very carefully" about the potentially huge implications for the economy, jobs and future prosperity.
"I hope that the European Parliament will meet its (responsibilities)," he added, in the same way the 27 EU leaders had met theirs by agreeing to compromise on their differences.
Parliament head Martin Schulz, however, had repeatedly insisted that the cuts were unacceptable to most lawmakers.
Schulz made his position clear to EU leaders as they began the talks and then warned even more bluntly afterwards that he could not go along with a budget which would likely result in a deficit — barred under EU law, but familiar territory for most member states.
He was backed up Friday when the leaders of the four biggest parties in parliament rejected the accord outright.
Parliament "cannot accept today's deal in the European Council as it is. We regret that Mr Van Rompuy did not talk and negotiate with us in the last months," they said in a joint statement.
"The real negotiations will start now with the European Parliament. We will maintain our priorities which we have clearly stated many times."
The prospect that parliament may also conduct July's vote by secret ballot — and Schulz claimed to have enough support for that — must also give EU leaders pause for thought that the assembly might just decide to buck the system.
An EU source recognised the problem.
"The best case scenario is that parliament gives its consent" to the current proposal but that seems unlikely, the source said.
"The worst case scenario is a that parliament says 'No,' we will never agree. (In that case) there would be no budget or (EU leaders) would have to come back to change it," the source said.
In between, there "are very many scenarios," the source said, adding: "We will have to find an understanding."
An editorial in the Belgian daily Le Soir regretted the cutback in EU spending as a "political failure" for Europe but parliament still had to have its say, with rejection leading to the rollover of the current 2013 budget into 2014 and so on.
MEPs, it noted, also had more demands than just the total amount involved — they wanted more flexibility in spending, the right to review and revise the budget as it proceeds, and a promise the EU itself will be allowed to raise more of its own resources, rather than rely so much on member states.
"Another very difficult set of negotiations are therefore going to open up in coming weeks," it said, adding that to "avoid pressure being put on individual lawmakers … parliament should hold a secret vote on the 2014-20 budget."
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