Collapse of Budget Talks Poses New Setback to European Union

Share with others:


Print Email Read Later

BRUSSELS -- A summit meeting of European leaders collapsed Friday amid bitter discord over a new budget for the European Union, delivering a further blow to a 27-nation grouping already struggling to contain a debt crisis, social discontent fueled by rising unemployment, and doubts about the long-term viability of the euro currency.

Leaders abandoned efforts to set the shape of a trillion-euro long-term budget and called for a new round of talks early next year to try to reach a deal.

Prime Minister David Cameron of Britain, who along with the leaders of the Netherlands, Sweden and several other countries had pushed hard for deep cuts, criticized proposals that left spending on the union's administrative machinery intact.

This, he said at a news conference, showed that "Brussels continues to exist as if in a parallel universe," referring to the headquarters for the European Union, which employs about 33,000 people in the European Commission, the union's main administrative arm.

Mr. Cameron complained that "more than 200 commission staff earn more than I do."

The refusal to trim bureaucratic costs, which amount to about 6 percent of total spending, is "insulting to European taxpayers" as many governments are slashing spending, Mr. Cameron said.

The European Commission had no immediate comment on Mr. Cameron's remarks, but officials noted that the commission last year announced a number of civil service overhauls. These include plans to reduce the staff by 5 percent between 2013 and 2017 through "normal turnover," to raise the minimum working week to 40 hours from 37.5, and to increase the retirement age to 65 from 63.

The impasse after two days of negotiations was the second failure this week in Brussels. European finance ministers met all night on Monday without reaching an agreement on whether to release the next round of emergency aid to Greece, where unemployment is around 25 percent.

Herman Van Rompuy, the president of the European Council, which represents the leaders of European Union member states, convened the summit meeting and called off the negotiations rather than prolonging them through the weekend. He said that the European Union's budget "has to be balanced and well prepared, not in the mood of improvisation, because we are touching upon jobs, we are touching upon sensitive issues."

"We should be able to bridge existing divergences" in the new year, Mr. Van Rompuy said.

Much of the attention at the meeting focused on Mr. Cameron, who rallied a group of other countries in favor of deep cuts to the Multiannual Financial Framework, a seven-year spending plan.

Disagreements over where the ax should fall left France and Germany on different sides, disrupting a French-German tandem without which significant deals in Europe rarely happen. Germany also pushed for cuts, though not as insistently as Britain.

France defended payments to farmers, which make up around 40 percent of the current budget, but insisted that there was no rupture with Germany. "I don't only defend the position of France, but the position of Europe as a whole," President François Hollande said at a news conference.

The negotiating marathon over the budget is held every seven years. The focus on hard cash tends to push national interests to the fore and swamp talk of European harmony, a cause for which the Norwegian Nobel Committee last month named the European Union as the recipient of the Nobel Peace Prize.

The budget, which amounts to about $168 billion per year, goes mostly to subsidize farmers and support regional projects in poorer member states. These policies were originally intended to help bind Europe together and mute the economic discord that in the past fueled antagonisms that led to bloody wars.

But differences in economic performance and in priorities between member states are huge, pushing them to embrace starkly divergent agendas in budget talks.

In large measure, this is because what began as an economic bloc comprising six similarly developed market economies in Western Europe is now a 27-member body that includes 10 much poorer Eastern and Central European nations that were part of the socialist bloc.

As well as divisions between east and west, there is also a big gulf between northern countries, especially Germany, and so-called Club Med states in the south like Greece, which, burdened with huge debts, is struggling to keep its economy afloat and avoid social unrest.

"There are still important differences on a number of key issues, especially the overall size of the budget and the fairness of distributions between member states," José Manuel Barroso, the president of the European Commission, told reporters as the summit meeting broke up on Friday afternoon.

world

This article originally appeared in The New York Times.


Advertisement
Advertisement
Advertisement

You have 2 remaining free articles this month

Try unlimited digital access

If you are an existing subscriber,
link your account for free access. Start here

You’ve reached the limit of free articles this month.

To continue unlimited reading

If you are an existing subscriber,
link your account for free access. Start here