Minister for Europe to address "unacceptable" EU Commission budget proposals

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Minister for Europe David Lidington said that the UK finds the Commission budget proposals "unacceptable" as EU Ministers plan to discuss the issue in Brussels on 12 September.

In a written ministerial statement to Parliament on the agenda for next week’s meeting the Minister for Europe said:

“The General Affairs Council will meet in Brussels on 12 September. I will attend.

Next Multiannual Financial Framework

The Presidency intends to present the outcome of the discussion held by the Friends of Presidency Group. This is a Committee of officials from the Member States, with attendance from the Commission, to prepare and discuss aspects of the next Multiannual Financial Framework. The Commission proposals were published in June 2011 and are unacceptable to the UK. The UK Government has been clear that, at a time of ongoing economic fragility in Europe and tight constraints on domestic public spending, the Commission’s proposal for the Multiannual Financial Framework is unrealistic. It is too large; it is not the restrained budget the Commission claims and it is incompatible with the tough decisions being taken in countries across Europe. The negotiations are at a very early stage and discussion is expected to be general.

Following the GAC, Ministers will have an orientation debate during lunch. This will be an opportunity to discuss general issues such as how the budget operates / functions. In particular the structure of the budget - this means how the budget headings are set out, for example what level of flexibility there should be to move funds between envelopes. The discussion will also touch on the macro-economic assumptions upon which the Commission’s figures are based, i.e. assumptions about growth, GDP and the rate of inflation. There will also be discussion of emergency funds, such as the Emergency Aid Resevere, and how these funds operate.

I will place particular emphasis, during my interventions, on the principle that the budget should be transparent.

Economic governance

The Presidency will update the Council regarding the “six pack” of legislative proposals for Economic Governance proposed by the Commission to implement the recommendations of President Van Rompuy’s Economic Taskforce.

The six recommendations from the Commission called for a strengthening of both the preventive and corrective arm of the existing Stability and Growth Pact, including new regulations to formalise sanctions for Eurozone countries; provided for new regulation to improve macroeconomic surveillance across the EU27; and included a new Directive which sets out minimum standards for Member States’ domestic fiscal frameworks.

The Government has supported the proposed economic governance legislation in broad terms. The March Finance Ministers Council (ECOFIN) agreed a general approach to the six proposals including a UK exemption from relevant articles of the Fiscal Frameworks Directive. Negotiations are currently underway with the European Parliament (EP).

European Council of 17-18 October 2011

Delegations will be presented with a draft agenda, submitted by the President of the European Council, to set out the main items that the European Council is expected to address on 17-18 October 2011. The agenda for the October European Council will include Economic Policy, and external aspects of the EU economic policy including trade; preparations for the G20 summit on 3-4 November; and the EU position ahead of the climate change discussions in Durban (28 November - 9 December). Additional agenda items may be added in the lead up to the Council.

Accession Treaty with Croatia

The Presidency is likely to use the opportunity to take stock of the work done so far in drafting the Accession Treaty with Croatia. Discussion is likely to be limited, although the date and venue for the formal signature of the Accession Treaty may be raised.”