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Politics no image

Published on November 20th, 2012 | by Katharina Obermeier
Image © [caption id="" align="alignnone" width="566"] © Pyrrhus By Catalaon[/caption] In war, we have winners, losers, stand-off's, and usually lots of collateral damage. Sometimes we also get Pyrrhic victories, when the battle costs the victor too much to be worth it. The current negotiations over the EU’s annual budget are starting to resemble a war featuring many of these elements, in which politicians on all sides have battled one another to a standstill. As with any war the motivations behind the battle of the budget constitute a confusing mixture of material gain, strategic advantage and ideology, coated with a heavy layer of propaganda. The entire conflict is intensified by rising concerns and Euroscepticism provoked by the ongoing eurozone crisis. Confusingly, there are three separate fronts in this battle. One is related to a €9 billion shortfall in the EU’s budget for the current year, 2012. Extra funds are required for projects such as Erasmus, the popular EU student exchange programme, and the European Social Fund, which provides funding to improve the outlook for Europe’s unemployed – an especially vital resource in a crisis which has caused unprecedented levels of unemployment. Yet somehow, national ministers, MEPs and European Commission officials have so far not been able to agree on how to finance this gap. The second “front” is the EU’s annual budget for 2013, which is in dispute as a result over the lack of agreement on the 2012 budget. The main antagonists on this issue are the European Parliament and the Council of the European Union, representing the governments of EU member states. Members of the European Parliament, who were in negotiations over the 2013 budget declared war on the Council by boycotting the discussions. They are essentially holding the budget for next year hostage until national governments come up with a way to fund the €9 billion shortfall in the 2012 budget. This break-down in negotiations has resulted in a kind of static warfare, with both groups entrenching themselves on their respective sides. The final front is being fought on the Multi-annual Financial Framework for the years 2014-2020, which sets out the EU’s annual budgets for the next seven years. This is proving particularly divisive, as the European Commission and many members of the European Parliament favour a 5% increase in the budget for the next 7 years, up to €1 trillion euros. Several national governments are vehemently opposed to this – most famously is the UK’s David Cameron, who has declared of the budget that “at best we would like it cut, at worst frozen” at its current level and threatened to veto the budget proposal, if he does not get his way. In response to this, several new proposals have been put forward which reduce new expenditures by about €75 billion euros, but these cuts are not enough for member states such as the UK and Sweden. On the other hand, the new proposals have drawn outrage from other member states such as Poland and Portugal for making significant cuts to cohesion policy – projects intended to improve the economy and well-being of less developed areas of the EU – and from France, which fears a loss of subsidies for its agricultural sector. The underlying ideological confrontation between euro-sceptics  who would like to reduce the EU’s influence and budget, and EU enthusiasts, who believe that the European institutions can achieve greater things with additional funds than national governments on their own, is complicated by each party’s specific interests in how the budget is split up. It’s a battle along a philosophical divide, but in which each combatant is motivated by the thought of earning a small material – or even symbolic – victory to bring home to its electorate. As often happens in war, it is impossible to predict how long this battle will go on. European leaders are gathering for a summit on November 22 at which they will discuss the EU budget, but some are predicting that there won’t be a deal until next spring, or even later. As is often the case in war, the longer the fighting continues, the more everyone loses. If the budget for 2014-2020 is not approved by next year, the EU will be operating on an emergency monthly budget based on the one for 2013, making it impossible for it to invest in new projects or make long-term commitments. On the other hand, funding for cohesion policy would continue unchanged. This means that if the UK were to veto the budget, it might well find that it had won a Pyrrhic victory.

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Battle of the Budget

© Pyrrhus By Catalaon

In war, we have winners, losers, stand-off’s, and usually lots of collateral damage. Sometimes we also get Pyrrhic victories, when the battle costs the victor too much to be worth it. The current negotiations over the EU’s annual budget are starting to resemble a war featuring many of these elements, in which politicians on all sides have battled one another to a standstill. As with any war the motivations behind the battle of the budget constitute a confusing mixture of material gain, strategic advantage and ideology, coated with a heavy layer of propaganda. The entire conflict is intensified by rising concerns and Euroscepticism provoked by the ongoing eurozone crisis.

Confusingly, there are three separate fronts in this battle. One is related to a €9 billion shortfall in the EU’s budget for the current year, 2012. Extra funds are required for projects such as Erasmus, the popular EU student exchange programme, and the European Social Fund, which provides funding to improve the outlook for Europe’s unemployed – an especially vital resource in a crisis which has caused unprecedented levels of unemployment. Yet somehow, national ministers, MEPs and European Commission officials have so far not been able to agree on how to finance this gap.

The second “front” is the EU’s annual budget for 2013, which is in dispute as a result over the lack of agreement on the 2012 budget. The main antagonists on this issue are the European Parliament and the Council of the European Union, representing the governments of EU member states. Members of the European Parliament, who were in negotiations over the 2013 budget declared war on the Council by boycotting the discussions. They are essentially holding the budget for next year hostage until national governments come up with a way to fund the €9 billion shortfall in the 2012 budget. This break-down in negotiations has resulted in a kind of static warfare, with both groups entrenching themselves on their respective sides.

The final front is being fought on the Multi-annual Financial Framework for the years 2014-2020, which sets out the EU’s annual budgets for the next seven years. This is proving particularly divisive, as the European Commission and many members of the European Parliament favour a 5% increase in the budget for the next 7 years, up to €1 trillion euros. Several national governments are vehemently opposed to this – most famously is the UK’s David Cameron, who has declared of the budget that “at best we would like it cut, at worst frozen” at its current level and threatened to veto the budget proposal, if he does not get his way. In response to this, several new proposals have been put forward which reduce new expenditures by about €75 billion euros, but these cuts are not enough for member states such as the UK and Sweden. On the other hand, the new proposals have drawn outrage from other member states such as Poland and Portugal for making significant cuts to cohesion policy – projects intended to improve the economy and well-being of less developed areas of the EU – and from France, which fears a loss of subsidies for its agricultural sector. The underlying ideological confrontation between euro-sceptics  who would like to reduce the EU’s influence and budget, and EU enthusiasts, who believe that the European institutions can achieve greater things with additional funds than national governments on their own, is complicated by each party’s specific interests in how the budget is split up. It’s a battle along a philosophical divide, but in which each combatant is motivated by the thought of earning a small material – or even symbolic – victory to bring home to its electorate.

As often happens in war, it is impossible to predict how long this battle will go on. European leaders are gathering for a summit on November 22 at which they will discuss the EU budget, but some are predicting that there won’t be a deal until next spring, or even later. As is often the case in war, the longer the fighting continues, the more everyone loses. If the budget for 2014-2020 is not approved by next year, the EU will be operating on an emergency monthly budget based on the one for 2013, making it impossible for it to invest in new projects or make long-term commitments. On the other hand, funding for cohesion policy would continue unchanged. This means that if the UK were to veto the budget, it might well find that it had won a Pyrrhic victory.

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About the Author

Katharina Obermeier

Katharina considers herself a German-Canadian hybrid. She grew up in Germany and completed her BA in International Relations at the University of British Columbia in Vancouver, Canada. Politics, especially in relation to concepts of nationality, have always fascinated her, and she is particularly interested in international political economy. During her studies, she was an avid participant at Model United Nations conferences, and helped welcome international exchange students to her university. She is currently completing an internship at a Brussels-based trade association and hopes to work in European affairs in the future. In her political writing, Katharina marries social democratic principles with a keen interest in the European Union and its implications for European politics and identity. She writes to counteract simplistic ideas about politics and economics, continuously attempting to expose the nuances and complexities involved in these subjects.



  • On a more subjective note, it's ridiculous how much money dictates our lives and well-being. Money truly makes the world go round….

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