Power, money and reversion points: the European Union's annual budgets since 2010

ABSTRACT

At the close of 2010, an immediate effect of the rule changes to the European Union’s budgetary powers brought in by the Lisbon Treaty was a non-agreement of the annual budget for 2011, which was repeated for the budgets of 2013 and 2015. Interviews and documents show that the European Parliament lost and the Council won in determining spending outcomes for 2011 and immediate payments for the subsequent years; whether this also resulted in lower budgets overall is ambiguous. When spending increased, this was in line with the will of the Council. The most significant variable was the change in the rules, which shifted the location of the default budget or reversion point to Council’s advantage if there were no agreement.

KEY WORDS:

• Council of the European Union
• European Parliament
• European Union budget
• Lisbon Treaty
• reversion point

Acknowledgements

I am grateful to Christina Eckes and the two peer reviewers of the Journal of European Public Policy for their insightful comments on earlier versions of this contribution.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Giacomo Benedetto is senior lecturer in politics and policy, Royal Holloway, University of London, UK. Address for correspondence: Dr Giacomo Benedetto, Department of Politics and International Relations, Royal Holloway, University of London, Egham, TW20 0EX, UK.

ORCID

Giacomo Benedetto http://orcid.org/0000-0001-5646-0207

Notes

1. The MFFs last up to seven years and govern the maximum spending by year that is permitted for the EU. For 2007–2013, this was set at 1.048 per cent of gross national income (GNI), falling to 1.00 per cent after 2013.

2. Compulsory expenditure was linked to agriculture, fisheries and aspects of foreign policy, compulsory since these were items under which the EU was contractually obliged to provide financing. It accounted for approximately 40 per cent of spending by 2009. The remaining 60 per cent was deemed non-compulsory and included cohesion spending for deprived regions, as well as investment to promote growth and competitiveness.

3. Interview, EcoFin official #1, 15 December 2011.

4. Given credence by interview with EcoFin official #2, 15 January 2014: ‘The Commission's DG Budget is not able to manage spending demands from within the Commission so it is up to EcoFin to behave like the EU's collective Finance Ministry.’

5. See appropriations at: http://ec.europa.eu/budget/explained/glossary/glossary_en.cfm (accessed 29 August 2015).

6. I am grateful to Alan Matthews for his advice on pre-allocation and non-differentiation.

7. However, at the start of the 2014–2020 MFF, commitments in the agreed budget fell from €151 billion in 2013 to €143 billion in 2014. The EP could use approval of the MFF as a means to extract slightly higher payments in the 2014 annual budget.

8. Interviews: Commission official, 23 June 2011; EP policy advisor #2, 23 June 2011; EP policy advisor #3, 8 December 2011.

9. Interview, EP policy advisor #3, 8 December 2011.

10. Interviews: EP policy advisor #1, 22 June 2011; EP policy advisor #2, 23 June 2011. In an interview on 21 June 2011, the budgets advisor (#4) to the EFD (Eurosceptic) group expressed different policy preferences from the advisors of the EPP, S&D and ALDE groups, but confirmed the same process of events as the others for the breakdown of conciliation in November 2010.

11. Interview, EP policy advisor #3, 8 December 2011.

12. Interview, Commission official, 23 June 2011.

13. Interview, EP policy advisor #2, 23 June 2011.

14. Interview, EcoFin official #1, 15 December 2011.

15. Interview, EP policy advisor #2, 6 December 2011.

16. Interview, Commission official, 7 December 2011.

17. Interview, Commission official, 7 December 2011.

18. Interview, EP policy advisor #2, 6 December 2011.

19. Interview, Francesca Balzani MEP, EP rapporteur for 2012 budget, 14 February 2012.

Additional information

Funding

I am grateful to the Faculty of History and Social Sciences at Royal Holloway, University of London, for financial assistance.