Differences in European parliament and council over enlargement budget

A meeting of the European Parliament and the European Council in Athens has not produced agreement over the budget for enlargement. However, the parliament is determined to give its assent to the accession treaty next week despite the budgetary dispute.

The council rejected the parliament's demand to adjust the EU's financial perspective running up to 2006 so that enlargement could be financed adequately. The European Parliament insisted on increasing the budget for internal policies by €600 million in favour of the future member states. The Greek presidency was not willing to go beyond a €300 million increase.

Sources said the controversy did not have any bearing on the Lm81 million negotiated by Malta for the first three years of accession starting on May 1 next year.

The current agreement on the financing of enlargement fixes the budget for the future EU members, laid down in Annex XV to the Accession Treaty, which encroaches on the parliament's prerogative to have a say in budgetary matters. Annex XV fixes the budget for the new members for structural policies until 2006 and for agricultural expenditure until 2013. The European Parliament is now waiting for a decision by the 15 EU ambassadors before it decides how to proceed. If the council refuses to adjust the financial perspective sufficiently, the parliament might consider that the council is renouncing the interinstitutional agreement, which contains the financial perspective.

However, there is consensus within the European Parliament to keep the enlargement timetable and ratify the accession treaty on April 9, which is a prerequisite for the signature of the treaty, which is to be signed at a special summit in Athens later on this month.

Delegations of the European parliament and council were unable to reach full agreement in Athens on Tuesday on the budget for the accession of new member states by May 2004.

Some progress was made, however, which should allow the full parliament to vote in favour of accession on April 9. Following the council's decision to include budgetary figures in the accession treaty (Annex XV), parliament adopted a resolution last Thursday saying the council's move represented a unilateral violation of parliament's budgetary prerogatives as well as discrimination for the future between current and new member states.

Greek deputy finance minister Georgios Floridis acknowledged the parliament's budgetary rights as laid down in the EC treaty, even though Annex XV to the accession treaty contains budgetary figures until 2006 - and in the case of agricultural expenditure until 2013. The Greek presidency representative also agreed that financial discrimination against the new member states should be avoided, by applying the budgetary procedure to all 25 member states on an equal basis from 2004.