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EU budget deal falls apart, Italy opposed to farm reductions

'Cuts, allocation of resources not satisfactory' says Monti

23 November, 19:26
EU budget deal falls apart, Italy opposed to farm reductions (ANSA) - Brussels, November 23 - European leaders failed to reach a deal on the European Union's budget for the 2014-2020 period at a summit in Brussels on Friday. Italian Premier Mario Monti said the inconclusive results "do not compromise anything," but added he was unhappy with the agricultural reductions proposed in talks.

"The allocation of resources and cuts in the revised proposal are not satisfactory," he said. On Thursday, Agriculture Minister Mario Catania said Italy preferred to have no deal at all on the EU's budget rather than a bad deal. "We need a fair solution that protects Italian taxpayers because there must be the right balance between what Italy contributes to the EU budget and what it receives," he said. "But there must also be proper protection for our farmers," Catania said.

EU leaders were trying to agree on a seven-year draft budget presented by EU President Herman van Rompuy.

But political differences soon emerged with France and Italy protesting over proposed cuts in agriculture and cohesion funds and Britain threatening to veto spending rises.

The proposal put forward by Van Rompuy foresaw an additional 11 billion euros for cohesion policies (in favour of the more disadvantaged regions) and an additional 7.7 billion euros for agriculture.

The total balance would have remained unchanged.

Brokering a deal is particularly difficult since ratification requires all countries to agree and just one veto is enough to derail negotiations. German Chancellor Angela Merkel said that there was potential for a budget agreement to be reached at the beginning of 2013.

Upon leaving the summit, Merkel said that "there is margin for an accord among the 27 member states. We do not want to isolate anyone". European Council President Herman Van Rompuy said Friday's failure to reach a deal for the European Union's budget for the 2014-2020 period was "no drama". "We needed two sessions in 2005 (to reach an agreement) too," Van Rompuy said. "There's the possibility of finding an agreement at the start of 2013". Commission President José Manuel Barroso's tone was less optimistic. Failing to reach an agreement in due time, he said, will incur "huge costs in political, economic and social terms".

In his assessment, negotiations failed because "there are still important differences of opinion regarding the total size (of the budget) and distribution among countries". Luxembourg Premier and President of the Eurogroup of eurozone finance ministers Jean-Claude Juncker called the draft budget "insufficient".