Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 33: To ask the Minister for Foreign Affairs if agreement has been reached on the EU budget for 2011; and if he will make a statement on the matter. [43326/10]

Micheál Martin (Cork South Central, Fianna Fail)
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Last May the European Commission adopted its draft budget for 2011 proposing a 5.9% increase in payment appropriations over 2010. The Council's position, adopted in August, approved 2.91% in payment appropriations. The European Parliament in October reversed the funding reduction by the Council and set a 2011 budget at close to the Commission's initial draft budget. As no agreement was reached at that stage a Conciliation Committee (consisting of representatives of the Council and the European Parliament) was established at the end of October with a view to finding agreement between the two sides. There was some discussion at the last European Council meeting on 28 – 29 October 2010 on the issue of the EU's 2011 budget. EU leaders agreed at that meeting that "it is essential that the European Union budget and the forthcoming Multi-annual Financial Framework reflect the consolidation efforts being made by Member States to bring deficit and debt on to a more sustainable path". En marge of the October European Council meeting a group of thirteen EU Heads of State and Government (UK, Germany, France, Italy, the Netherlands, Sweden, the Czech Republic, Denmark, Austria, Finland, Slovenia, Estonia and Malta) wrote jointly to President Van Rompuy and Prime Minister Leterme (as Presidency of the Council) in which they made clear that the maximum increase acceptable to them is 2.91%.

The conciliation process between the Council, led by the Belgian Presidency and the European Parliament continued to seek agreement right up to the deadline for the conclusion of the process which was 15 November 2010. Regrettably, agreement was not reached between the two sides. The 2.91% increase in payment appropriations for the 2011 budget was broadly agreed between the Council and the European Parliament, however the Parliament sought a political declaration which would have given an indication of how it might be involved in practice in the next Multi-annual Financial Framework (MFF) and in relation to Own Resources. A number of Member States were unprepared to go beyond the letter of the Treaty provisions with regard to the European Parliament's role in the forthcoming MFF; the Parliament maintained their insistence on a political declaration as mentioned, and the result was that agreement was not reached.

What now happens is that the Commission must present a new budget proposal. If agreement is not reached on a new budget proposal by 1 January 2011, then the EU would proceed on the basis of "provisional twelfths" (one twelfth of the previous year's budget being released each month). This would be a less than ideal outcome as it would have consequences for ongoing regular expenditure and may effectively halt expenditure on new projects, if funds were unavailable.

Throughout this extended process, Ireland has sought to support the Belgian Presidency in their efforts to reach agreement with the European Parliament. We regret that the conciliation process has not yielded a positive outcome on this occasion. We will continue to work with partners with a view to seeking agreement on an EU budget for 2011 at the earliest possible juncture.