EU 2013 budget talks in crisis amid row over spending

European Parliament President Martin Schulz (centre) with two EU prime ministers, 13 Nov 12
Image caption Martin Schulz (centre) told EU leaders that MEPs could not attend the last-ditch talks

The EU has reached deadlock in talks on next year's budget, with governments refusing demands for extra money.

The crisis comes just a week ahead of a summit intended to map out EU spending plans for the next seven years.

Euro MPs refused to attend talks on Tuesday night because the governments - called the Council - did not approve an extra 9bn euros (£7bn; $12bn) in "emergency funding" for this year.

The European Commission will now have to redraft the 2013 budget plan.

If there is no deal before January, the current budget will be rolled over month by month. Any increase in spending then requires agreement between the Commission, Council and MEPs.

In 2012 the budget for the 27-nation bloc was 129.1bn euros, a 1.9% increase on 2011.

Correspondents say the UK, Denmark, the Netherlands and Sweden are pushing hardest for the EU to rein in spending.

On a visit to Italy on Tuesday, the UK Prime Minister, David Cameron, failed to get support from his Italian counterpart Mario Monti for the UK stance on the EU budget.

"Our positions have elements which do not perfectly coincide, to use British understatement," said Mr Monti, who was formerly an EU commissioner.

"We are less convinced than the United Kingdom about the need for a significant reduction."

'Raiding taxpayers'

In Brussels, the European Parliament President, Martin Schulz, told 15 prime ministers on Tuesday that MEPs would not negotiate on the 2013 budget because there was no agreement on the extra 9bn euros requested to meet this year's EU bills.

The Commission says the 9bn euros would cover commitments in the areas of infrastructure, research and education.

The UK's Financial Secretary to the Treasury, Greg Clark, said "it is senseless that the only budget deal the European Parliament is interested in is one that massively increases EU spending - raiding Europe's taxpayers.

"The UK has been very clear from the outset that the EU should not be demanding billions of euros more from taxpayers when everyone is making economies at home."

The EU Commission and European Parliament want an EU budget rise of 6.8% in 2013.

But most governments want to limit the rise to just 2.8%, and the UK government, led by the Conservatives, wants EU spending frozen at 2011 levels.

The UK government also opposes a proposed 5% increase in the multi-year budget for 2014-2020, compared with the current 2007-2013 budget, threatening a veto if necessary.

An EU summit aimed at reaching a deal on that budget will be held on 22-23 November.

Polish Foreign Minister Radek Sikorski told the BBC that he disagreed with the UK position on the multi-year budget.

Speaking on the Hardtalk TV programme, he said Poland agreed that EU spending levels should be frozen - but based on the 2013 figure plus inflation, not based on the 2011 budget figure.

"Britain's position is different, I'm afraid. It wants to take as the base a single annual budget, and an artificially low one - 2011 - and not even the budget, but the actual expenditure, and the budget was underspent. That amounts to a very drastic cut of 200bn [euros]. This is why Britain is so different from the position of the Commission and all the other states," he said.

The Republic of Cyprus chief negotiator, who is steering the annual budget talks, said the 2013 budget had been "held hostage" by the talks on extra funding for this year.

"We regret that this opportunity has been missed due to the lack of flexibility by the European Parliament," Andreas Mavroyiannis said.

The ministers did agree to give Italy 670m euros in EU aid to help the recovery of Emilia Romagna, which suffered severe earthquake damage in May.

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