Two weeks of tough talks on the European Union budget got off to a sorry start Friday with austerity-minded states refusing to plug a 9.7-billion-euros hole for this year in money used for the needy. Friday's talks were aimed at settling the 2013 budget but snagged after several hours in discord over the 2012 accounts, auguring badly for a November 22-23 summit called to settle the bloc's even more hotly disputed 2014-2020 spending plans.
Officials said the talks were likely to last into the wee hours. "We are 390 minutes into the budget council. No agreement yet," the British delegation said in a tweet. The deadline for a deal on a 2013 budget is Tuesday, but net contributors, led by Britain and including Germany and France, are seeking a sharp reduction to match the spending cuts and austerity policies of most European capitals.
However, 2012 figures show the EU budget was short of 9.7 billion euros at end October, with huge sums of some 1.5 billion euros owed for instance to Italy, Poland and Spain to compensate victims of flooding or job cuts. "Everyone agrees that Italy is entitled to 670 million euros to compensate for floods but there is no agreement on how to find the funds," an EU official told AFP on condition of anonymity.
With the Erasmus student exchange programme also at stake, some 100 famous Europeans from footballers to philosophers have called on the EU to reach a deal. "The economic crisis has hit Europe's youth very hard," said a letter from figures including former international footballer Lilian Thuram, Spanish filmmaker Pedro Almodovar and British playwright David Hare.
"One in five young Europeans - more than five million - are without a job. This cannot continue. We cannot afford a lost generation," it said. For 2013, the European Commission and European Parliament are seeking a 6.8 percent increase to 138 billion euros to bolster growth and jobs in the slowing economy. "If we succeed in these negotiations now, we'll create a better atmosphere for convergence and agreement in the (summit) negotiations on the multi-annual budget," said Cyprus's deputy EU minister Andreas Mavroyanis, who led the talks.
"If not, this will poison the atmosphere," he warned. France, Finland and Germany want the 2013 budget to be cut by 5.0 billion euros while London has suggested even more, stressing the need for austerity. The Commission, the EU's executive arm, argues this will seriously undercut any chance for economic growth, making worse the very problems such countries say must be fixed through more belt-tightening.
Earlier this week, the Commission slashed its economic forecasts for both the 27 member EU and 17-nation eurozone, highlighting how the debt crisis has undermined growth and sent jobless rates soaring. Last month, British Prime Minister David Cameron threatened to veto the 2014-20 budget at the November 22-23 summit if Brussels insisted on an increase of 5.0 percent to around 1.0 trillion euros. If there is no agreement on the 2013 budget, the EU would base its spending for next on the 2012 programme, rolled over on a monthly basis.