BRUSSELS — As European Union leaders began their 14th hour of budget negotiations after a sleepless night, Valdis Dombrovskis, the prime minister of Latvia, took the floor early Friday to address what, for his Baltic nation of around two million people, is a vital question: Why should a Latvian cow deserve less money than a French, Dutch or even Romanian one?
In a system that requires unanimous approval of budget decisions, what Latvia wants for its dairy farmers — or Estonia for its railways, Hungary for its poorer regions or Spain for its fishermen — is no small matter. It is this cacophony of local concerns that explains why, despite Germany’s outsize role in decision-making, the European Union has such trouble reaching an agreement on something as basic as a budget.
And if simply agreeing to a budget is so daunting to member countries, it raises serious questions about the limits of the political and economic integration that have long been the master plan for champions of European unity.
After a failed attempt to set spending targets at a summit meeting in November and in a 24-hour marathon of talks this week, European leaders finally agreed late Friday to a common budget for the next seven years. The new budget, slightly smaller than its predecessor — the first decrease in the European Union’s history — reflects the climate of austerity across a Continent still struggling to emerge from a crippling debt crisis.
The colossal effort that was required to agree to a sum of about 960 billion euros ($1.3 trillion), a mere 1 percent of the bloc’s gross domestic product, exposed once again the stubborn attachment to national priorities that has made reaching agreements on how to save the euro so painful in recent years.
“We need to agree, and to agree we need to take into account all countries,” Mr. Dombrovskis said in an interview. The Latvian leader, who rushed to his hotel for a shave, shower and change of shirt in the middle of the night, described the ordeal as “not a pleasant experience,” but said, “It only happens every seven years, so we can tolerate it.”
But toleration is not the same thing as cooperation.
“What we’re seeing is that European integration is very important to European leaders as long as it doesn’t imply that someone has to be paying for someone else,” said Daniel Gros, director of the Center for European Policy Studies, a research organization in Brussels. “Sharing a European budget is not going to be the essence of the E.U., but crafting the rule books for open borders and stable banking systems will be.”
The spectacle of European leaders haggling through the night over amounts of money representing rounding errors in their national accounts demonstrated vividly their reluctance to make collective policies that erode their nations’ sovereignty.
“The budget negotiations are the most visible sign of member states winning and losing from the European Union,” said Hugo Brady, a senior research fellow at the Center for European Reform, a research organization. “The result is a totally parochial budget that is poorly adapted to rapidly changing times.”
Before it becomes law, the deal faces yet another hurdle in the European Parliament, which has the power to veto the budget.
Some of the most influential figures in Parliament have already signaled that they are prepared to reject a budget that would spend less on Europe in the years ahead.
Martin Schulz, the president of Parliament, said this week that he would not approve a budget that widened the gap between the cash governments pay up front and the somewhat higher amounts, known as commitments, that make up the overall budget.
Britain, Sweden and the Netherlands were among the Northern European nations that fought hard to reduce agricultural subsidies and increase spending on research and development to bolster the bloc’s global competitiveness.
Despite those efforts, farm spending remained the largest single portion of the budget, accounting for about 38 percent of the total — although that was down from about 42 percent in the previous seven-year budget period.
Galileo, a grossly overbudget and still unfinished satellite navigation project that aims to free Europe from its dependence on the United States’ global positioning system, escaped the cuts and is to receive 6.3 billion euros from 2014 to 2020.
This article has been revised to reflect the following correction:
Correction: February 8, 2013
An earlier version of this article misspelled, on one reference, the last name of the Latvian prime minister. It is Dombrovskis, not Domobrovskis.
Article source: http://www.nytimes.com/2013/02/09/business/global/european-union-budget-talks.html?partner=rss&emc=rss