European Parliament boycotts EU 2013 budget talks

BRUSSELS Tue Nov 13, 2012 4:46pm EST

BRUSSELS (Reuters) - The European Parliament boycotted talks with EU governments on Tuesday to finalize the bloc's budget for 2013 in a row over an extra 9-billion-euro ($11.44 billion) spending request for this year.

Negotiators from both sides had been due to meet on Tuesday night to try to reach a deal before a midnight deadline, after a first round of talks foundered on the parliament's refusal to discuss the 2013 budget before agreement on the extra funds.

"<European Parliament> negotiators will not attend the meeting with Council on the budget 2013 scheduled for tonight, because there is no agreement among the member states about a supplementary budget for the current year," European Parliament President Martin Schulz said in a statement.

The boycott reflects frustration within the parliament at governments' attempts to cut EU spending proposals to mirror austerity cuts at home, and augurs badly for talks between the two sides later this year on the bloc's more contentious long-term budget.

The only way Tuesday's talks could go ahead would be if EU member states came up with a "constructive proposal" at the last minute to address the funding shortfall for this year, a parliamentary source said.

But the British government immediately rejected any compromise that would increase EU spending this year.

"It is senseless that the only budget deal the European Parliament is interested in is one that massively increases EU spending - raiding Europe's taxpayers," British junior finance minister Greg Clark said in a statement.

"At today's Council meeting I will not approve any more money for the EU."

The Commission - backed by the Parliament - says the extra money is needed to avoid cutting off EU funds for education, infrastructure and research projects.

The row has also held up 670 million euros in EU aid for the Italian region of Emilia Romagna, which was hit by earthquakes earlier this year. Governments insist they will honor their pledge, despite a lack of agreement on how to pay for it.

If no deal is reached on the 2013 budget before the midnight deadline, the Commission will be forced to draft a new budget proposal in a final bid for a deal before the end of the year.

The Commission and parliament are demanding a budget of 138 billion euros in 2013, representing a way-above-inflation 6.8 percent rise from this year's level. Most national governments want to limit any increase to 2.8 percent.

($1 = 0.7867 euros)

(Additional reporting by Matt Falloon in London; Editing by Rex Merrifield and Andrew Heavens)

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