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Revised EU budget plans unveiled

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Revised plans for next year's EU budget have been unveiled

Revised plans for next year’s euro-budget have been unveiled – sticking to a 2.9% increase demanded by EU ministers in the face of continuing efforts by MEPs to win a 6% rise.

But the European Commission insisted there were new concessions to MEPs in its latest proposals, in the form of a “contingency fund” of up to 3.5 billion euro (£3 billion) in the event of “unforeseen circumstances”.

Talks on the EU budget ended in deadlock last month after Britain led a group of countries refusing to offer MEPs a bigger say in future spending priorities.

EU budget Commissioner Janusz Lewandowski said the Commission was keen to get the 126.5 billion euro (£106 billion) budget agreed by the end of the year.

Failure to do so would mean an effective freeze in EU spending, until the budget row is settled.

That would suit Prime Minister David Cameron, who wanted a spending freeze all along, but agreed with other ministers to accept a 2.9% increase, but not a euro more.

The new compromise sticks to that pledge – with the Commission confirming that the “contingency fund” could not in any case be used until 2012 at the earliest.

But Mr Lewandowski seized the concession as the key to a deal with MEPs in the next few weeks, saying: “I am happy that the Council (EU ministers) have agreed to establish a contingency margin of up to 0.03% (3.5 billion euro) as a last resort instrument to react to unforeseen circumstances. We welcome it as a major step forward.”

However, such a fund already exists in the current EU budget rule book, and MEPs may now demand a more substantial concession before accepting the plan.

But British officials were content that the new deal does not break the 2.9% increase for next year. A UK Government spokesman said: “The UK has been clear that any increase above 2.9% from 2010 budget levels is unacceptable.”

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