It’s hard enough to get 27 member states to agree unanimously on a seven-year, €1,000bn budget – as anyone following the latest EU summit wrestling match can attest. But completing an EU budget deal requires one more thing: the consent of the European parliament.
Martin Schulz, the German social democrat and parliament president, reminded EU leaders and the Brussels press pack of this fact on Thursday evening. In a mildly foreboding press conference, Schulz re-stated his threat that leaders should be prepared for MEPs to block any budget proposal that strays too far from the €1,033bn proposal submitted more than a year ago by the European commission, the EU’s executive arm.
“Yes, we are prepared to make savings, but we are not prepared to have the European Union budget simply amputated,” he said.
Schulz declined to say whether the latest €960bn proposal being considered by Herman Van Rompuy, the European council president, crossed the line from extreme weight loss to amputation. But he was clearly displeased. Read more
The big question entering Thursday’s summit is whether Herman Van Rompuy, the European council president, can find the right balance between the UK’s demands for an austere long-term budget and France and Italy’s calls for a more robust one. The more Van Rompuy stretches toward the Brits and fellow budget hawks by reducing his proposal, the more those on the other side of the debate pull back. Eventually, the whole thing could snap.
But on the eve of the big meeting, Van Rompuy may have found a clever way to give his budget more elasticity: By increasing the gap between budget commitments and payments. Read more
Ukip leader Nigel Farage at a European Parliament session in Strasbourg last year
Following prime minister David Cameron’s address on Britain’s EU future, there may not be two politicians in Europe spoiling for a fight more than the two men who are arguably the most high-profile members of the European Parliament: Nigel Farage and Guy Verhofstadt.
There’s one thing Britain’s foremost eurosceptic and Belgium’s most prominent European federalist agreed on: Within minutes of Cameron finishing his speech in London, both had blasted out e-mail responses lambasting it.
Farage, however, prefaced his criticism by saying he viewed it as the “greatest achievement to date” of his political group, the UK Independence Party, since it put Britain’s EU exit firmly on the agenda. Read more
Martin Schulz, far right, with his fellow EU presidents ahead of budget talks on Monday.
Just how bleak do things look for next week’s summit intended to reach a deal on the EU’s next €1tn seven-year budget?
Only hours after French prime minister Jean-Marc Ayrault threw cold water on the latest compromise effort, another major player in the game – Martin Schulz, the European parliament president – said he now expected the high-stakes summit to come up empty.
“I’m very sceptical about an agreement next week,” Schulz told a small group of Brussels-based reporters, arguing that the compromise put out yesterday by Herman Van Rompuy, European Council president, was significantly different from that offered by the Cypriot presidency just two weeks ago – a sign of “how deep the division is within the Council.”
Van Rompuy’s proposal (a leaked copy of which we’ve posted here) has set off another round of recriminations, helping turn a meeting this morning of EU ambassadors into a complaint-fest, diplomats said. But Schulz said he believed the biggest stumbling block remained Britain, which is the only country calling for a complete EU budget freeze. Read more
Rajoy is still angered by Spain's snubbing during Mersch's selection earlier this year.
If you thought the long, drawn-out saga of Yves Mersch’s nomination to a seat on the European Central Bank’s powerful executive board could not get any stranger, think again.
The Spanish government this morning informed Herman Van Rompuy, the European Council president, that it objected to the fast-track “written procedure” Van Rompuy had begun in order to get Mersch finally seated in the job. The procedure – which was begun after the European Parliament refused to sign off on the nomination last month – was due to end today, making it possible for Mersch to take the long-empty seat by November 15.
But the Spanish veto means Mersch now can’t go through and the appointment battle, which has dragged on for nearly ten months, will have to be taken up by the EU’s presidents and prime ministers when they summit in Brussels later this month.
The question gripping the Brussels chattering classes now is: Why? Was Madrid trying to fire a warning shot across the bow of the ECB and Berlin, which have been ratcheting up the pressure over the conditions of a long-expected Spanish rescue programme? Senior officials insist the real reason is far more prosaic. Read more
Van Rompuy this week at the UN. MEP Goulard called his letter "empty (and quite insulting)".
The ongoing saga of the European Central Bank’s empty seat on its six-member executive board appears to be, well, ongoing.
Senior members of the European Parliament’s economic affairs committee met yesterday for a brief coordinating session and decided to, yet again, postpone the confirmation hearing for Yves Mersch, the Luxembourg central banker whose quest to secure the empty seat has been the subject of intense internecine fighting for more than nine months.
To update readers, Mersch’s nomination is now being held up by the committee because they believe no woman candidate was seriously considered for the post. Herman Van Rompuy, president of the European Council, wrote to the parliament in the last week to explain leaders’ positions – but committee members found the response “very thin,” prompting the decision to put off a confirmation hearing again.
Sylvie Goulard, a French liberal MEP who is a senior member of the committee, told Brussels Blog in an e-mail she found the Van Rompuy letter “empty (and quite insulting)”. Excerpts from the letter are after the jump. Read more
Who will succeed José Manuel Barroso as president of the European commission?
That question has long been debated around the corridors and coffee bars ofBrussels. But it gained special urgency after Barroso’s state-of-the-union speech in Strasbourg last week. In it, Barroso suggested that each political party nominate their own choice for commission president and place that person atop their list for the 2014 European elections.
The idea is to generate some much-needed excitement for EU elections that tend to suffer from paltry voter turnout.
“This would be a decisive step to make the possibility of a European choice offered by these elections even clearer. I call on the political parties to commit to this step and thus to further Europeanise these elections,” Barroso said.
So that begs the question: who is generating the most buzz as the next commission president? Who has the right stuff? As a service to our readers, Brussels Blog has decided to present a list of early contenders from each of the major political families. Read more
Luxembourg's Yves Mersch, left, arriving at an ECB executive board meeting in Finland last year.
Yves Mersch’s path to a seat on the European Central Bank’s powerful six-member executive board has been rocky.
The head of the Luxembourg central bank was, at first, not even considered a leading candidate for the position, which was being vacated by a Spaniard and, Madrid assumed, would be filled by a Spaniard. But a caucus of northern European countries balked at putting another southerner on the board, so inflation hawk Mersch became their candidate.
That set off months of nasty backroom battles, where the Spanish insisted on compensation – at one point they held out for the head of the new €500bn eurozone rescue fund, which was supposed to go to German economist Klaus Regling – in exchange for acceding to Mersch. Luxembourg retaliated by holding up plans to give Spain more time to hit tough budget targets.
In the end, the northerners won out. Mersch was nominated, and Spain was left empty handed. Everyone thought the fight was over. Everyone thought too soon: this morning, the European Parliament announced it was postponing Mersch’s confirmation hearing scheduled for Monday because no women candidates were considered for the job. Read more
As momentum builds towards finding a “roadmap” for commonly-backed eurozone bonds ahead of next month’s EU summit, where the topic is likely to be on the table, officials have begun focusing on interim steps before getting to full-blow mutualisation of debt, which Berlin has made clear it will not support.
Much of the attention thus far has gone to a “wise men” report put out by five German economists last year that would create a “debt redemption fund,” which would refinance debts from eurozone countries over 60 per cent of their gross domestic product. The fund would jointly guarantee the excess debt to help pay it off through cheaper borrowing costs.
But in recent weeks, people briefed on internal debates in Frankfurt and Brussels say another incremental idea has caught the interest of EU officialdom: instead of eurozone bonds, the currency bloc should start with eurozone bills, short-term debt backed by all 17 euro members. Read more
The long-running campaign to scrap the European parliament’s once-a-month commute to Strasbourg bagged a sizeable ally this week: none other than the chamber’s new president, Martin Schulz.
While much of the attention in recent days has been on Greece, the parliament has been on the road again, leaving its usual Brussels residence for its second home near the French-German border.
The two-seat arrangement is estimated by critics to cost €200m a year, a public-relations disaster for the legislative arm of an institution which is imposing austerity across much of the continent.
Schulz has always been rumoured to be an anti-Strasbourger. But he has thus far remained closeted, presumably to avoid ruffling French feathers ahead his ascension to the presidency last month. Paris is very eager to keep the parliament on its home turf, if only once a month. Read more
Hungarian prime minister Viktor Orban listens to MEPs during Wednesday's debate in Strasbourg
The buzz around Brussels since Viktor Orban’s appearance before the European parliament Wednesday has been that the Hungarian prime minister got the better of the parliamentarians, coming across as conciliatory and reasonable in the face of occasionally hectoring MEPs.
But Hungary’s troubles in Brussels are far from over. In addition to continued European Commission resistance to giving Budapest much-needed financial aid until it overhauls a new law critics believe threatens the independence of the central bank – a topic of discussion today when Hungary’s lead negotiator meets in Brussels with Olli Rehn, the Commission’s economic chief – next week is going to be a rough one for Orban’s government.
Most unexpectedly, the three Benelux countries – Belgium, Netherlands and Luxembourg – have asked that Hungary be discussed at Friday’s meeting in Brussels of all 27 national Europe ministers. Although no decisions will be taken, the move for the first time takes the Hungarian issue from the realm of EU technocrats to that of national politicians, where things could get more heated. Read more
Hungary's Viktor Orban during his address in Strasbourg last year. Brussels Blog will be live blogging his appearance on Wednesday .
Viktor Orban, Hungary’s combative prime minister, already had a lengthy list of Brussels’ critiques to rebut during an address today at the European parliament in Strasbourg, which the Brussels Blog is planning to live blog when it begins at 3pm local time.
Expectations are high after last year’s rowdy appearance, and the list of particulars has only grown in the last 24 hours: the European commission, the European Union’s executive arm, on Tuesday declared three new Hungarian laws in violation of the EU treaties, and warned that one may threaten the independence of the country’s central bank.
Just this morning, however, the commission added to the list again, hitting out at Orban – who prides himself on ridding his country from Soviet communism – for failing to respect “media freedom and media pluralism”, the same criticism he faced in Strasbourg a year ago. Read more
For the unfortunate diplomats locked in the Justus Lipsius council building all of Friday and into Saturday morning, the European Union’s 2012 budget negotiations were an arduous affair. Upon emerging, one groggy diplomat lamented “an evening I can never get back.”
But to the union at large, the remarkable thing about the talks was how easily they went down.
For those who missed the news early Saturday morning, representatives from the EU’s 27 member states, the European parliament and the European commission agreed on a 2.02 per cent increase in next year’s budget, bringing it to €129bn.
That was well below the 5.23 per cent sought by MEPs, and the 4.9 per cent recommended by the commission. Read more
So much for the “six pack,” the sprawling fiscal reform package that was supposed to rein in government debt and prevent a recurrence of the crisis currently threatening the euro.
Hungary placed the six pack atop the priority list for its six month European Union presidency, and worked doggedly to try to forge a compromise with the European parliament before its term ended last week.
The Hungarians were not the only ones keen to close a deal: Herman Van Rompuy, the European council president, spent months in tortured negotiations leading a task force that developed the rules, which would allow Brussels to fine governments that do not put their fiscal houses in order. Angela Merkel, the German chancellor, has promised the Bundestag she will not participate in a new eurozone bailout fund, set to go into effect in mid-2013, without the new budget controls in place first.
But as Poland takes the EU’s presidential reins, it appears intent on dialling back the urgency. Polish diplomats will resume negotiations with MEPs in Strasbourg this week. But people involved in the talks say it is now impossible that a deal could be finalised before September – if one gets done at all. Read more
Corien Wortmann-Kool, a Dutch MEP, trekked to Luxembourg for breakfast this morning with finance ministers from her political group, the European People’s Party. The hope was that meeting over coffee and croissants might help to narrow differences between the European parliament and the member states over the sprawling “six pack” legislation, which would force eurozone countries to rein in spending and make their economies more competitive. It is one of the eurozone’s chief policy responses to a crippling debt crisis.
But the breakfast meeting yielded no breakthroughs – in part because many of the finance ministers did not turn up. After a contentious meeting to discuss the Greek debt crisis that lasted into the wee hours of the morning, they either could not rouse themselves from bed or were simply too busy.
The empty seats at the breakfast table highlighted a broader concern of Wortmann-Kool: that the Greek crisis is so consuming that there is little energy or capacity to complete the six pack, let alone anything else. “As you can imagine at the moment, Greece is the issue,” she told Brussels Blog this morning, complaining that “the decision-making power in Europe seems to be lacking.” Read more
Barroso, left, and Verhofstadt
Fellow Brussels Blogger Josh Chaffin has a fun piece in today’s paper on MEP Guy Verhofstadt, the former Belgian prime minister who has moved into a central role in the suddenly intensifying negotiations over the so-called “Six Pack” – the six legislative measures that would give the EU the power to fine member states that don’t get their fiscal houses in order.
In the story, Josh quotes a 2004 US diplomatic cable we obtained through WikiLeaks where Pat Cox, then the European parliament president, gave Rockwell Schnable, the US ambassador to the EU, a run-down on how Verhofstadt was handling losing the European Commission presidency to José Manuel Barroso. As we said in the story, Cox said Verhofstadt was “devastated”.
As we frequently do here at the Brussels Blog, we thought we’d give readers a bit more on the cable. After the jump, we’ve included the entire section where Cox talks about Verhofstadt. It’s an interesting read. Read more
It will be Luxembourg that will have the final say on Brussels versus Strasbourg, now that Paris has decided to sue under Lisbon.
In other words, the fight over the seat of the European Parliament has suddenly become a full-blown EU inter-institutional brawl.
The French government on Tuesday decided to take the European Parliament to the European Court of Justice in Luxembourg after parliamentarians last week decided to tweak the terms of their regular commute between Brussels and Strasbourg. Paris claims the move violates the EU’s new Lisbon treaty, its governing constitution. Read more
Paris lost no time in rebutting yesterday’s study suggesting members of the European Parliament would rather end the monthly to-and-fro between Brussels and Strasbourg.
A statement released by the foreign ministry on Friday was a Gallic blend of rebuke, snub and curtness.
“The question of the seats is judicially mandated by the treaties: these are applicable to member states and to institutions alike,” it reads. Read more