EU budget talks break down on how to use fines money

[BRUSSELS] Disagreement between the European Parliament and member states on how to use windfall income from fines levied by the European Union has stalled progress on the 2015 budget, raising a risk of deadlock running into the new year.

Lawmakers complained on Tuesday that member states had waited till the final day of a three-week budget conciliation process before presenting parliament with a demand that 5 billion euros (US$6.3 billion) in unbudgeted fines income should go to member states to help them curb their fiscal deficits.

Governments, which have long battled with the Brussels legislature to hold down EU spending, rejected parliament's call to settle some of the bloc's 4.7 billion euros of unpaid bills with the windfall - most of it from penalties imposed on firms and states which breached EU antitrust and other regulations.

The European Commission, the executive arm of the bloc, will present a new draft 2015 budget in the coming days for approval by parliament and the member states, a Commission spokesman said. If no budget is agreed by Dec 31 then, as happened in 2011, monthly spending will be capped at this year's levels.

Parliament, which had passed an original draft by a large majority, renewed criticism of member governments, saying their late payment of contributions to the EU's 146-billion-euro annual budget meant funds were not reaching recipients of EU grants - including small businesses, researchers and students.

EU spending, much of it going on support to farmers and underdeveloped regions, accounts for only about 2 per cent of all public expenditure across the bloc. But governments in the wealthier Western members which fund the Union face growing opposition at home to curb their contributions to Brussels.

REUTERS