Financial compromise causes tensions at eu summit

Financial compromise causes tensions at eu summit

Great britain’s reservations led to new tensions at EU summit in brussels. On thursday, the heads of state and government were initially unable to agree on a rapid approval of the EU financial planning up to 2020. British head of government david cameron in particular voiced concerns. However, the final approval is a prerequisite for releasing billions for the fight against youth unemployment as planned.

Great britain has received a discount on its EU payments since 1984 because it benefits comparatively little from the union’s agricultural pots. Most recently, this "british rebate" amounted to 3.6 billion euros per year (2011). Cameron reportedly resists possible reductions of up to ten percent through changes in the tax base. Even at the special summit in february, the "british rebate" was not questioned.

"It is absolutely vital that we stick to the february agreement and that we protect the british rebate," said the british prime minister.

The president of the eu parliament, martin schulz (SPD), also expressed skepticism: "i’m not sure that this is a done deal," schulz said this evening about the compromise negotiated between the eu parliament and member states on the financial plan, which has a total volume of 997 billion euros.

He said he hopes unanimity can still be reached at the summit. "I just noticed that there was still some controversy," said schulz, who was among the participants at the start of the summit.

"David cameron is a man with a certain view of the eu budget that makes me fear that nothing can be left out," schulz said. "But my impression is that an agreement will be found"." If there is no agreement, "then the deal has failed".

The EU will then have no financial planning, but annual budgets. This does not mean that payments for rough EU programs could then no longer be made: at present, parliament is creating the conditions for 72 programs to also be put on the budget list "in an annual process".

At their mammoth two-day meeting, the leaders also wanted to agree on measures, with the help of the european investment bank (EIB), to overcome the dangerous credit crunch for small and medium-sized enterprises in crisis-stricken countries.

But the main focus was on the fight against youth unemployment. Spain and italy in particular insist on aid. In the 27 EU countries, 5.6 million youths and young adults are out of work. To this end, six billion euros earmarked in the EU budget by the end of the decade will be spent in the next two years to get young people into work.

But there will be no blank check: "the billions can be useful if it is combined with the necessary reforms," says dutch head of government mark rutte.

Immediately before the summit, german chancellor angela merkel (CDU) reiterated her call for greater global competitiveness. The theme of the summit was therefore, in addition to combating youth unemployment, above all stronger economic policy coordination, as called for by germany and france. "The priority is not to keep creating new pots," said the chancellor.

On the fringes of the summit, the chancellor met with cypriot president nikos anastasiadis. According to information from delegation circles, the focus was on the implementation of the agreed reform program and the general situation in cyprus. The cash-strapped island republic received a ten-billion-euro aid program in the spring to prevent state bankruptcy.

In the long term, merkel considers a solidarity fund for the euro countries conceivable, as she confirmed in the bundestag. SPD candidate for chancellor peer steinbruck blames merkel for high youth unemployment in europe.

The night before the meeting, the EU finance ministers also agreed that in the future, troubled institutions in europe will be rescued first by shareholders and customers – and no longer solely by taxpayers. Small savers with deposits of up to 100,000 euros are protected. Wealthy savers and small businesses with deposits above this limit are to have their turn only in the end. The EU parliament still has to give the green light.

The program of the two-day summit also included budget and budgetary supervision. Deficitsunder get more time to save. Croatia’s head of government, zoran milanovic, also took part in the EU summer summit. His country will be on the 1. July as 28. Member state come to the union.