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EU budget deal elusive as parliament digs in heels

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(Globalpost/GlobalPost)

BRUSSELS (Reuters) - European Union negotiators are struggling to conclude talks on the bloc's next long-term budget, risking delays to the disbursement of funds destined for poorer regions and the fight against youth unemployment.

Negotiators for member states and the European Parliament are due to meet later on Tuesday to try to finalize the budget, worth nearly 1 trillion euros between 2014-2020. But officials are downbeat on the chances for a deal.

"I'm not overwhelmingly optimistic," said one EU official involved in the talks, who spoke on condition of anonymity.

"Most people feel the outline of the deal is pretty obvious, but it's really a question of politics, and it's still not clear whether the parliament is prepared to finish it off now."

In February, EU leaders unanimously agreed to fix spending over the next seven-year period at 960 billion euros ($1.3 trillion), which represents the first ever decline in real term spending compared with the previous period.

The deal must be approved by a majority of MEPs in the parliament before it come into force. While they have refrained from trying to unpick the headline figures agreed at the summit, they are demanding other concessions that could undermine the austere spirit of February's deal.

Chief among these is the power to move unspent funds from one year's budget to the next, instead of returning them to national coffers as at present. Governments say they are willing to allow such transfers up to a maximum of 4 billion euros per year, but the parliament insists on unlimited flexibility.

Even with a 4 billion euro limit, EU officials agree the change could result in increased spending over the next budget period compared to the current one, depending on the outcome of annual budget talks, where actual spending is decided.

That ensures that cost-cutting governments in Britain and the Netherlands, for example, will be reluctant to make further concessions on the issue.

While there is pressure on MEPs from national governments and voters in some countries to conclude the talks, most believe governments feel the greater sense of urgency.

Next week, EU leaders will meet in Brussels to discuss the specifics of an initiative to tackle rising youth unemployment. But the 6 billion euros earmarked for the scheme is dependent on a deal on the long-term budget.

If the talks drag on beyond September, officials warn that the bloc would likely be forced to adopt a provisional budget for 2014, delaying some long-term EU programs in areas such as infrastructure spending and research.

A parliament official said that while MEPs were aware of the importance of concluding the talks, many are prepared to hold out in order to extract a better deal from governments.

(Reporting by Charlie Dunmore)

http://www.globalpost.com/dispatch/news/thomson-reuters/130618/eu-budget-deal-elusive-parliament-digs-heels