Hopes Fade for Quick Deal on European Union Budget

“I don’t think there’s been enough progress so far,” Prime Minister David Cameron of Britain told reporters as he arrived at the summit meeting venue. “There really is a problem that there hasn’t been the progress in cutting back proposals for additional spending,” he added.

Late Thursday, Herman Van Rompuy, the president of the European Council, presented a new budget plan for the seven years from 2014 to 2020. The new outline reshuffled the amounts to reduce proposed cuts for agriculture and development assistance but kept the overall spending ceilings in his earlier proposal on the budget, which is worth the equivalent of about $1.3 trillion.

Mr. Cameron suggested that Mr. Van Rompuy’s plan represented little more than “tinkering” and said it wasn’t “the time for moving money from one part of the budget to another.”

Britain so far has gotten nowhere in a push to slash spending on the Union’s administrative apparatus, a small but symbolic area of costs and one of the few budget items easily comprehensible to ordinary citizens.

After the first day of negotiations broke up after midnight Thursday, Chancellor Angela Merkel of Germany said the leaders’ positions remained “quite far apart.” She indicated that a deal on spending is unlikely this week.

The negotiating marathon over the budget, known as the Multiannual Financial Framework, is held every seven years and, focused on hard cash, tends to push national interests to the fore and swamp feel-good talk of European harmony, a cause for which the Norwegian Nobel Committee last month named the European Union as the recipient of the 2012 Nobel Peace Prize.

The budget, which amounts to about 130 billion euros per year, goes mostly to subsidize farmers and support regional projects in poorer member states, policies that 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 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 East and Central European nations formerly 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.

Diplomats recalled with dark humor how Tony Blair, the former British prime minister, compared the round of E.U. budget negotiations in 2005 with trying to broker peace in Northern Ireland — only more difficult.

Nearly a third of the Union’s member states have hinted in recent days at using the veto that allows each country to blow up a budget deal.

Much of the attention at the special budget summit meeting has focused on demands for deep cuts by Mr. Cameron. Failure to achieve these would likely intensify growing hostility toward the Union in Britain and could even help prod the country in the direction of one day pulling out of the group altogether.

But Germany, too, wants big cuts, and that is a position that has put it at odds with Paris and unsettled a French-German tandem without which significant deals in Europe rarely happen. French officials said Paris does not object to slimming spending, only to sharp cuts in farm subsidies.

Yet for Prime Minister Elio Di Rupo of Belgium, the overall amount proposed by Mr. Van Rompuy should be higher to help the bloc out of the economic doldrums.

“The big problem, the basic problem is that there is not enough money,” Mr. Di Rupo told reporters. “This is dramatic because European countries need the support of the E.U.,” he said.

With divisions looking unbridgeable, a number of leaders echoed Ms. Merkel’s suggestion of a second budget summit meeting, perhaps early next year.

“I do hope that we can move on, but if that is not possible, we have to come back some other day,” Prime Minister Jyrki Katainen of Finland told reporters Friday. “Everything seems to be open. Some opinions are very far from each other, and it’s very difficult to assess at the moment what will happen today,” he added.

Article source: http://www.nytimes.com/2012/11/24/world/europe/hopes-fade-for-quick-deal-on-european-union-budget.html?partner=rss&emc=rss