Negotiators from the European Parliament, the Council of Ministers and the European Commission have agreed a way forward for talks on the European Union’s long-term budget, ending a lengthy stalemate. Budget negotiations are scheduled to start on Monday (13 May), two months after MEPs rejected a deal on the multi-annual financial framework that member states’ leaders had agreed at their summit in February. 

In rejecting the leaders’ position – €908.40bn in payments for 2014-20 – MEPs set out conditions for their agreement, including member-state approval of a request from the Commission for €11.2bn in additional funds for the 2013 budget.

Whether talks on the long-term budget will continue once they start depends on a meeting of national finance ministers on Tuesday (14 May). The ministers will be asked by Ireland, the current holder of the rotating presidency of the EU’s Council of Ministers, to endorse an additional contribution of €7.3 billion to the EU’s 2013 budget, as a first instalment for the Commission’s top-up request.

The Netherlands and the UK made it clear at a meeting of member states’ ambassadors to the EU yesterday (7 May) that they will vote against the €7.3bn; France, Germany and Spain also believe the figure to be too high, but have signalled that they might endorse it next week in a bid to keep the negotiations going. Sweden and Denmark also voted ‘No’ yesterday.

On their own, the Netherlands and the UK cannot block an agreement on payment of this first instalment.

Ireland is seeking a political agreement on the multi-annual budget and on the additional funding for 2013 before it hands over the rotating Council presidency to Lithuania on 30 June.

A delay beyond June would make it difficult to agree the necessary implementing legislation to ensure that no programmes are interrupted on 1 January 2014, when the new multi-annual cycle starts. MEPs have pledged to break off negotiations on the long-term budget should the finance ministers fail to agree the additional funds for the 2013 budget.

They are seeking a firm commitment that the member states will contribute the remaining €3.9bn of the top-up in the autumn, so that the Commission’s request will have been paid in full.

Alain Lamassoure, a centre-right MEP who chairs the Parliament’s budgets committee, said yesterday: “What is important for us [MEPs] is a guarantee, as specific as possible, that at the end of the year an additional sum to make up the €11.2bn will be available.”

He added: “Next week’s meeting [of finance ministers] seems like a good time to check if there is a qualified majority to go up to the €11.2bn.”

The agreement to unblock budget talks and start negotiations next week was struck at a meeting of the principal players on Monday (6 May). The member states – represented by Prime Minister Enda Kenny of Ireland and Eamon Gilmore, Ireland’s foreign minister – agreed in principle to approve the Commission’s request for a top-up of the 2013 budget.

In return, the European Parliament – represented by Martin Schulz, the president, and Lamassoure – agreed that the request would be dealt with in two instalments. The meeting also included José Manuel Barroso, the president of the European Commission, and Janusz Lewandowski, the European commissioner for financial programming and budget.

The member states had agreed a two-stage approach last week, but the size of the first instalment provoked a quarrel among them. Net recipients of regional aid were pitted against the EU’s net contributors, led by Germany, the Netherlands and the UK, who used their blocking minority to prevent a deal for a first instalment of between €5.6bn and €8.4bn.

A second attempt by Ireland to forge a weighted majority in favour of a €7.3bn first instalment at yesterday’s meeting of ambassadors also failed. But diplomats believe that the finance ministers of Germany and France will endorse it next week, on the basis that an agreement on the long-term budget is more important. Spain is expected to follow suit.

The member states that benefit most from the EU’s regional aid are not happy with the two-stage approach, and agreed to it only on condition that payment requests for regional aid are treated as a priority. This condition is likely to complicate negotiations with MEPs.

Giovanni La Via, a centre-right Italian MEP who is in charge of the 2013 budget in Parliament, said that if most of the additional 2013 funding goes to regional spending, “The Council will be giving money with one hand and taking it back with the other.” He called on member states to be “open to negotiations on the allocation”.

A draft statement that the Irish presidency has prepared for consideration by the finance ministers says that the Commission has not been able to “fully justify at this stage of the annual payments cycle the full scale of the proposed draft amending budget”.

It adds: “Therefore the Council is not in a position to agree to the full level of payment appropriations requested by the Commission at this stage.” The statement goes on to demand that the Commission provides updated estimates on payment needs in the autumn, to seek savings where possible, and to cover as many payments as possible by re-allocation of unspent money.