By Martin Banks - 12th November 2012
Parliament and member states face a race against time to thrash out an agreement on the 2013 EU budget.
The breakdown of negotiations on next year's EU budget means the two sides have until midnight on Tuesday, formally the last day of the conciliation period, to reach a deal.
The commission and parliament had asked for a budget rise of 6.8 per cent in 2013, but most governments wanted to limit the rise to just 2.8 per cent.
The dispute is over an extra €9bn in "emergency funding" for 2012 to cover budgets for education, infrastructure and research projects.
But Germany, France, the UK and other governments questioned the funding, and eight hours of talks on Friday produced no agreement.
The failure of the talks will dent hopes of agreement on the 2014-2020 budget, which is up for discussion later this month.
If there is no agreement, trilateral talks between parliament, the commission and member states will continue.
Continued failure to reach agreement, means the commission may be asked to come forward with a new draft budget.
This would need to be approved by parliament's budgets committee and plenary - as well as by member states - before the end of December.
On Monday, one parliamentary insider told this website, "With so little time left, it is a race against the clock to reach a deal."
The only outcome of an often heated meeting between negotiators last Friday was a declaration of political will to provide €670m in 'solidarity support' to earthquake victims in Italy, but this came without an agreement on how to finance it.
Speaking after Friday's deadlocked talks, French EPP member Alain Lamassoure said, "The differences between the positions of member states and parliament were too far apart to continue talks overnight."
The former French government minister, who is parliament's lead negotiator in the budget talks, said he hoped that there would be "sufficient basis" to have further discussions on Tuesday.
The 2013 budget is not the only subject of discussion with the EU having to find a solution to the budget shortfall to make payments in 2012.
These concern bills presented by member state authorities that manage EU funds and for funds managed by the commission.
A minority of member states insist that the commission should pay these bills from the current budget.
Lamassoure fears that, if there is no deal, the payments will be pushed back to 2013, which, it is feared, would jeopardise implementing EU policies next year.
EU programmes needing a solution on the budget impasse comprise lifelong learning - including the Erasmus student scheme, rural development, the European social fund, the cohesion fund and the seventh framework R&D programme.
Countries worst hit by the deadlock are Italy, Spain, Poland, Germany, Greece, Czech Republic and Bulgaria. All have pre-financed EU expenditure with amounts varying from €400m to €1.9bn.
Senior ECR member Martin Callanan insists on cutting funding for the EU, saying, "The most desirable outcome is for the EU budget to be reduced, thereby saving member states money.
"It is completely perverse for the EU to be imposing austerity and cutbacks on the member states while continuing to grow the EU budget centrally. If austerity is good enough for member state civil servants, it is good enough for the EU institutions as well," said the British Tory.
He believes the EU should cut back on waste and prioritise areas such as research and development.
Further comment came from party colleague Richard Ashworth, leader of the UK's Conservative MEPs, who said: "There was a degree of intransigence which does not bode well.
"Across Europe there are tough choices being made. Police officers, nurses, servicemen and women are being made redundant. That sad reality seems to be lost on some here, such is their lack of political objectivity.
"The idea that a gun can be held to governments' heads and demand they immediately stump up €9 billion is preposterous.
"I suspect the real objective here is a power grab on behalf of the parliament, which some are intent upon pursuing whatever the damage to taxpayers or Europe as whole."