PM: EU budget proposals still ‘unacceptable’ for Malta

EU budget deal unlikely, says Angela Merkel.

Lawrence Gonzi and Hermany van Rompuy discussed proposals to cut funds to Malta by €300 million.
Lawrence Gonzi and Hermany van Rompuy discussed proposals to cut funds to Malta by €300 million.

German Chancellor Angela Merkel said yesterday she doubted an agreement can be reached on the European Union's next budget at the summit taking place in Brussels.

The negotiations on the 2014-2020 budget have been characterised by most EU members supporting an increase in the budget, but several countries say it is unacceptable at a time of austerity.

Prime Minister Lawrence Gonzi said the latest proposal by European Council president Herman Van Rompuy was "absolutely unacceptable" despite being a slight improvement over original plans to slash Malta financial allocation by some €300 million.

Malta has benefited from funds of €855 million for the past seven years, but the figure was cut down to €480 million for the next seven-year financial framework.

Many EU Leaders were sticking to their positions, Gonzi told reporters, as budget talks were suspended late at midnight to resume today morning with new proposals.

Angela Merkel said that another summit may be necessary early next year if no deal can be reached now.

French President Francois Hollande also cautioned that an agreement might not be possible. "We should not consider that if we don't get there tomorrow or the day after, all would be lost."

The negotiations took place following a day of face-to-face meetings between Van Rompuy and each member state's leaders.

The European Commission wants an increase of 4.8% on the 2007-2013 budget, but the UK is demanding cuts in the budget to match austerity programmes back home. Van Rompuy wants to cap spending at €973 billion, but UK prime minister David Cameron wants greater cuts.

"Clearly, at a time when we're making difficult decisions at home over public spending, it would be quite wrong - it is quite wrong - for there to be proposals for this increased extra spending in the EU."

The UK already gets a €3.5 billion rebate (2011) negotiated by former prime minister Margaret Thatcher from the contributions it pays into the EU budget.

Cameron is backed by the Netherlands and Sweden, but Poland, Malta and other Eastern European states which rely heavily on EU cash want spending maintained or raised.

Hollande has also called for subsidies for farming and development programmes to be sustained for poorer nations - France has traditionally been a big beneficiary of EU farm support.

Failure to agree on the budget would mean rolling over the 2013 budget into 2014 on a month-by-month basis, putting some long-term projects at risk.