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EU budget talks collapse

This story about EU budget talks was published by EurActiv on 12th November 2010.

EU finance ministers failed to reach a compromise with the European Parliament over the 2011 budget yesterday night (11 November). If they fail to find a mutually acceptable solution by Monday, the 2010 budget will roll over to 2011, raising questions as to how the European Union will finance ambitious new projects such as the European External Action Service.

Polish MEP Sidonia J?drzejewska (European People’s Party; EPP), the European Parliament’s rapporteur on the EU budget, Parliament budget committee chairman Alain Lamassoure (France; EPP) and Parliament President Jerzy Buzek signalled their readiness to accept member states’ demand to increase the budget by just 2.91% for 2011, spearheaded by the UK [see ‘Background’].

In exchange, however, Parliament representatives asked for a stronger language on their institution’s say in negotiations over the next financial perspectives, including by providing for a “contingeny fund” and supplementing the budget with EU “own resources,” such as a possible new tax to help fund the Union’s budget after 2013.

Last week, German Chancellor Angela Merkel strongly rejected the idea of such an EU value-added tax (VAT), a tax on air transport or a share of new financial, corporate or energy taxes. Several other EU countries see such taxes as unfair, as they would see some countries pay more than others.

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