EU-Parliamentarians: It’s Time to Vote ‘No’!

The proposed budget would commit member states to a decade of austerity

Opinion | Raimund Loew | March 2013


It’s time the European Parliamentarians finally take a stand against their national leaders. This was the advice of Helmut Schmidt, otherwise no fan of commotion and coups d’état, to the social democratic MEPs in Brussels in early December, in a moving appearance with Jacques Delors. If the members could vote down the miserly EU-budget, they might find a way out of their impasse.

Two months later, we may possibly have managed it. Christian Democrats, Social Democrats, Liberals and Green Party Parliamentarians have come out with all guns blazing against the leadership-negotiated long-term budget of the European Union, whose ceiling of €960 billion would force the EU onto an austerity course for the next decade. No national government can agree to this. What everybody forgets is that, despite all promises to cut costs, national budgets invariably increase.

David Cameron, for one, can gloat: For the first time the EU’s financial manoeuvring room is narrowing. A loss of 3% is not devastating, but it is noticeable.

EP President Martin Schulz stuck his neck out particularly far in the polemics against the budget compromise. The German social democrat considers it deceit; at home, Angela Merkel is always his first target. That his social democratic friends from France, Austria or Denmark have all given the budget deal their blessing, is something he simply decided to overlook.

So whatever happens, the budget vote in Strasbourg in mid March is going to be exciting. The legal situation is clear. Should the majority of European delegates say "No", the parameters of the seven-year budget will have to be renegotiated. Otherwise the 2013 terms will remain, adjusted for inflation.

A coup of this kind would be a first for the otherwise sedate Strasbourg assembly. Europe would instantly be in an uproar – as the austerity budget would have been a gift for David Cameron, to keep Great Britain in the European Union. Angela Merkel spent an entire night negotiating between the British Prime Minister and growth advocates led by Francois Hollande. Should the deal in Strasbourg fail, calls for an EU exit would become louder. Continental Europeans and the British will have to decide much earlier than expected whether they really want a divorce.

On the merits alone, the negotiated framework has been a kind of muddling through – but hardly a disaster. Obviously, a declaration of austerity for Europe in the middle of a recession is nonsense. But at 1% of economic performance, the stimulus from the EU-budget is in any case minimal. The investment programmes in high-speed trains, Internet connections and energy grids, promoted by Commission President Barroso as "Connecting Europe", have been reduced. However previously they were non-existent. And in research, some 40% more is being spent than previously.

The proposal from national leaders to the EP calls for more flexibility between budget categories, including over year-end rollovers. Funds in Brussels never really run out, because projects are delayed or co-financing from member states is left out. If it were easier to shift money around, Brussels would be better equipped to react to change. So far, unspent money has always flowed back into national accounts at year-end. Were it to stay in EU coffers, the pressure for cut backs would be reduced.

The danger is in the political signal this sends. Budgets are policies cast in numbers, and a decreased EU-budget means less Europe. Werner Faymann is, in fact, right that European bailouts have been moving more money than ever before. However the national governments themselves decide what to do with the money. Everyone seems to have forgotten that it was only last year the European Council President Herman van Rompuy was commissioned to lay the foundations for a centralised European budget.

The Founding Fathers of Europe envisioned a budget of up to 10% of the GRP, which is enough to intervene in crisis situations. The shrunken EU budget is a step backwards from this vision.

The European Parliament’s veto could only be understood as a political statement against a dogma of cost-cutting and national rights. Still the European delegates are for the most part from the majority parties, whose leaders did the negotiating last week. That they truly have the political will to take a stand, as their former "Law and Order Man" Helmut Schmidt advised, is open to question. If they did, however, the dormant European Parliament would indeed abruptly come to life.


Raimund Löw is the Bureau Chief of the ORF in Brussels. He is also a commentator for Vienna’s weekly paper Falter, where the article was originally published on 15 February 2013.The article appears here with permission of the author. 


Translated by Dardis McNamee

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