European Union Budget Talks Break Up With No Plan

Protesters in Greece on September 26, 2012 protesting the imposition of austerity. The economic crisis of capitalism is devastating Europe., a photo by Pan-African News Wire File Photos on Flickr.

European Union budget talks break up with no plan

The European Union's talks end with no deal but plenty of hard feelings, a reminder of internal squabbling between the 27 member states just weeks before the EU will accept the Nobel Peace Prize.

By Henry Chu, Los Angeles Times
November 24, 2012

LONDON — Divisions within the European Union were laid bare by two days of haggling between leaders over a new long-term spending plan that broke up Friday with no agreement, but plenty of hard feelings.

Countries pushing for an increase in the EU's 2014-2020 budget, including France, ran into implacable resistance from dissenters led by Britain, which insists on a funding freeze at a time when many European nations are making steep spending cuts at home.

The failure to reach a compromise pointed up the chronic difficulty of getting 27 member states to agree on anything and offered an embarrassing reminder of internal EU squabbling less than three weeks before the body is scheduled to accept the 2012 Nobel Peace Prize.

At issue is a budget of about 1 trillion euros, or $1.28 trillion, which commentators note amounts to about 1% of the EU's economic output, a tiny proportion compared with that of the budgets of individual nations. Much of the money goes to development programs for the EU's poorest members and to farming subsidies that benefit some rich countries as well, especially France.

EU President Herman Van Rompuy tried to bridge the differences by offering a plan that included some cuts yet boosted spending on aid and agriculture. But few in the negotiating room were satisfied.

"Frankly, the deal on the table … was just not good enough," British Prime Minister David Cameron, the most vocal proponent of reining in spending, told reporters.

Despite its increasing estrangement from the rest of the EU, Britain was not alone. It was joined by mostly Northern European nations that get less back from the EU than they contribute.

"Like Britain, they write the checks. And together we had a very clear message: We're not going to be tough on budgets at home just to come here and sign up to big increases in European spending," said Cameron, who was under heavy political pressure at home to hold firm.

Van Rompuy downplayed the tension on display at the summit, saying that an agreement would probably be within reach when the 27 leaders take up the matter again early next year.

"There's no need to dramatize. These budget negotiations are so complex they generally take two goes. That was also the case last time around, in 2005," he said. "So the work will go on."

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