THE E.U. BUDGET (3)

Last November's summit meeting to decide on the E.U.'s next 7-year (2014-20) budget duly ended in deadlock, as I had predicted. So European leaders are meeting again today and tomorrow in order to try again.

My guess is that they will fail to reach agreement again, and for the same reasons. Too many countries (and the Parliament) have too many different views on what the budget is for, and what the money should be spent on. If money were available, then that could be used to oil the process. But it is precisely money that is lacking in all 27 Member States.

In advance of the summit, countries have been turning up the volume in their various demands. David Cameron wants a real terms cut rather than a spending freeze, while Denmark's Helle Thorning-Schmidt has threatened to veto the whole process unless the Danes get a kr.1 billion rebate. The local newspapers this morning suggested that she had been offered a percentage of that, but she rejected it.

Since any one of the 27 (and the Parliament) can veto the whole thing, the odds are not looking good. Expect everyone to come back and try again in three months' time.

UPDATE: Well, I got that one wrong, didn't I? Not only did they agree a budget framework, but it was the first ever cut in the budget framework in real terms, and the Danes got their kr.1 billion rebate. That Danish farmers will lose more than that in reduced help for agriculture rather got lost in the official press release playing up Helle's victories.

Having said that, the European Parliament has yet to approve it in order for it to take effect. The four largest parties there have all already said that they cannot accept it as it stands. So perhaps this is not the last word on the issue after all.

Walter Blotscher