Europe and the impact of the economic crisis

Parliament accepted the recommendation of the Council to limit the budget increase to 2.9% in 2011, but rejected the proposal for member states to commit more of their own resources to the EU budget.

Under the circumstances, the European Union is yet to adopt its budget for next year, while several investments and research projects will no longer be able to be supported financially. The president of the European Parliament, Jerzy Busek, has accused some member states like Britain, Holland and Sweden of closing the door on talks by their inflexible attitude.


The President of the European Council, Herman Van Rompuy, said that given the current crisis, the future of the European Union is at risk. He said that 2010, the first year of the Lisbon Treaty, was clearly marked by the crisis of the euro zone. “It was not a period of vision, but a period of survival”, said Van Rompuy.

“I am extremely disappointed”, said the president of the European Commission, Jose Manuel Durao Barroso as he left the talks. The Commission believes that failure to adopt the budget would affect not only investments, but also the European External Action Service, the new bodies in charge of financial supervision and cohesion policy.

Agriculture will receive, however, the biggest blow, especially in terms of the support for farmers, as pointed out by the European Commissioner for Agriculture, the former Romanian minister of agriculture Dacian Ciolos:

“Given that no decision has been made yet regarding the budget, the whole process by which the Commission is to reimburse payments to the member states may be delayed, which may affect the individual budgets of the member states, at least for a period of time.”

The deadlock over the adoption of the EU budget comes at a time when the euro zone is facing big financial problems as seen in Greece and Ireland. The latter said it was willing to receive support of several billion euros to rescue several banks.

According to Herman Van Rompuy, if member states cannot cooperate to keep the euro zone intact, the European Union will not be able to survive. The European Commission has already started to work on a new budget, hoping it will be adopted by the end of the year. The political impasse will undoubtedly also be discussed at the summit of EU leaders in December.