Reacting to the breakdown of the EU's budgetary negotiations UEF President Andrew DUFF says: "It is highly regrettable that one or two governments have pitched the EU into its first budgetary crisis for over twenty years. Agreement was certainly within reach. It was irresponsible, especially at this time of financial crisis, to have destabilised the Union's budgetary process. "UEF unequivocally supports the position of the Commission and European Parliament in these negotiations and opposes those, like the UK prime minister, who argues primitively for a freeze. The EU needs to be able to sustain agreed spending programmes, such as R&D and climate change measures, but also to pay for the new functions transferred on the EU from national governments under the Lisbon treaty ‑ notably the supervision of the financial sector and the development of common foreign and security policy. If no new budget is agreed before 2011, money for the CAP will begin to run out by February, leaving EU states with the problem of how to pay their own farmers. DUFF, who is a British Liberal Democrat MEP, added: "Parliament is right to argue that the EU retains a small sum (0.03% of EU GNI) to be used flexibly between budgetary headings, decided by QMV decisions of the Council. Unanimity means inflexibility, which can lead to paralysis. Among the early calls on the budget is likely to be the EU's €60 billion commitment to servicing crisis loans to Ireland and Greece. Only a budget which is buoyant can cope with crisis management. "But the heart of the battle is about the British and Dutch government's refusal to acknowledge Parliament's legitimate status as a partner in the negotiations on the new multi-annual financial framework from 2013 onwards. Messrs Cameron and Rutte should read Article 311 of the Treaty which gives Parliament the right to be consulted over a reform of the own resources system and the right of consent over its implementation. "They should also read Article 312 which gives Parliament the right to veto the new multi-annual financial framework. Experience shows that unless Parliament is recruited early on as a partner in such negotiations the final outcome will be a bust-up. Unless the negotiations on the reform of finances get off to a good start, the Union faces a return to the perennial budgetary quarrels of the past. "70% of the Union's current revenue comes directly from national treasuries -- with much clawed back, especially via the UK's notorious rebate. Parliament wants to grow the 30% of revenue now raised autonomously from levies, VAT or direct taxation, thereby reducing direct national contributions. The EU cannot be expected to perform well in the common interest of all its states and citizens if its finances remain in thrall to national treasuries whose mandate and political priorities are rather different. "We urgently need federal solutions to federal problems. We urgently do not need certain EU governments in the sway of populist and nationalist forces to block a radical shake-up of the EU's financial system." Editors' Note

Andrew Duff (ALDE/UK) represented the European Parliament in the Intergovernmental Conference which drafted the Treaty of Lisbon.

The UEF, founded in 1947 is a supranational political movement dedicated to uniting Europe along federal lines.

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