DPA /Brussels


The European Union may be a Nobel Peace Prize winner, but there was little harmony in Brussels this week as leaders attempted to decide how much the bloc should spend in the next seven years.
The effort to reconcile their differences ultimately proved fruitless, despite suggestions that a quick agreement could help restore sorely needed confidence in the crisis-battered continent.
The so-called multi-annual financial framework has always ranked among the EU’s toughest negotiations.
But with painful austerity measures being implemented domestically and frustration quickly spreading among crisis-weary citizens, the 2014-20 budget was set to be a tall order.
EU leaders were quick to downplay the lack of success at their crunch budget summit on Thursday and Friday, arguing that they simply needed more time to find common ground and that a deal would be within reach when they reconvene for talks early next year.
“I won’t use that word (failure) because it is not accurate,” French President Francois Hollande insisted at the end of the meeting. “Nobody won, nobody lost since there is no agreement.”
“Leaders showed good will,” Spanish Prime Minister Mariano Rajoy added. “Negotiation is always an art.”
It has not proven very successful in Brussels recently, though.
The delay in reaching a deal on the 2014-20 budget comes just over one week after the European Parliament broke off negotiations on the bloc’s 2013 budget, after failing to agree with EU governments on a procedural issue.
Eurozone finance ministers, meanwhile, made headlines just two days before the budget summit by delaying a decision on a bankruptcy-inhibiting bailout tranche for Greece, after almost 12 hours of talks failed to yield an agreement on long-term measures.
Other than denting the EU’s reputation for problem-solving, the deferred 2014-20 decision will also have practical consequences, as will the push by many countries to spend less, analysts warned.
“At the very least, the price for postponement is that European spending will be delayed, at a time where economies ... are likely to be performing badly and will need this additional injection,” said Fabian Zuleeg of the European Policy Centre think-tank.
“EU leaders have too often and too forcefully advocated the use of the EU budget for growth to be able to drop the idea without consequences,” Benedicta Marzinotto of the Bruegel think-tank added.
She argued for the EU budget to be reformed to make it “more flexible” and “safeguard it from future political power struggles,” suggesting a European Growth Fund that would be based on market borrowing and would face “a potentially disciplining effect.”
Zuleeg said that it was time for the EU to act on the increasingly eurosceptic tendencies of Britain, raising the prospect of what has come to be known as Brexit — a potential departure from the EU.
British Prime Minister David Cameron was widely considered to be the biggest hurdle to an agreement at the Brussels summit with a call for EU spending to be frozen at 2011 levels — with pressure back home to even demand a reduction, in the face of national austerity.
“When a country is no longer willing or able to agree a deal, there has to be a more fundamental decision ... Is (Britain) able to work with the rest of the EU or must it be permanently outside?” Zuleeg asked.
“Almost nobody in Brussels wants a British exit, but having a member state that can no longer be a constructive partner is not an option when the EU is facing challenges which threaten its very existence,” he added.
Britain’s neighbour Ireland will come to play a key role in the next chapter of the budget saga, as it is set to take over the EU’s rotating six-month presidency on January 1.
Diplomats have already warned not to “overestimate” the influence that Dublin might have on London.
Irish Prime Minister Enda Kenny warned at the summit that the presidency might be undercut by the very failure to strike a deal on 2014-20 spending.
“A country that has to bear considerable burdens at the moment would face a very difficult position in running an effective presidency if there’s not an agreement,” he said in Brussels.
“That presidency does not have very much authority in the absence of a decision over an overall budget,” he added.