European Parliament and top EU court resist budget cuts

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EU institutions are privately discussing with the European Commission how much public money they can inject next year as inflation continues. 

Letters between the EU’s Budget Commissioner Johannes Hahn and other EU reveal that the Commission wants the European Parliament to rein in its 2024 spending plans by some €28 million, and the Court of Justice of the EU to slash almost €6 million.

Senior players in the Parliament have pushed back on those demands, arguing that Hahn is deploying a sneaky, never-before-used budgeting trick that could force them to make painful cuts in areas outside of salaries. 

Parliament President Roberta Metsola railed against the Commission’s request in a letter she sent to Commission President Ursula von der Leyen last month, arguing that the Commission got its facts wrong.

In a May 8 letter, Hahn warned the Parliament that it is on course to blow through a spending limit requiring EU institutions to keep inflation-caused budget increases unrelated to salaries to less than 2 percent per year. 

However, the Parliament vigorously disputes that, and has calculated the spending increase as being safely within the limit — for the first time ever — at 1.97 percent.

In a new approach, the Commission has included inflation-linked increases to MEPs salaries as part of the 2 percent scope.

Describing Hahn’s move as a “unilateral decision” by the Commission, Metsola wrote it was “very unfortunate” that the Commission had made this request, especially as it came “with no prior consultation whatsoever on their rationale.” 

Hahn sent similar requests to other EU institutions as well.

The Court of Justice has joined the Parliament in raising concerns.

In a letter to Hahn dated May 15, Court President Koen Lenaerts wrote that the Commission’s decision to count remuneration and allowances for court members as nonsalary expenditures “poses a serious problem for our Institution.” 

He also cautioned, “If the Commission’s draft budget will be approved with the reduced amount for energy expenditure, the Court will incur the risk of being unable to face its obligations related to its energy consumption next year.”

Other institutions are in a similar boat — though perhaps not as affected.

“Indeed, this is a common problem,” said a European Court of Auditors official, who spoke on condition of anonymity due to the sensitive nature of the topic, noted that the Court of Auditors is also touched “but perhaps to a lesser degree” than institutions such as the Parliament, “as we have less members.”

A spokesperson for the European Court of Auditors, though declining to comment on discussions with the Commission, said: “We continue to communicate with the Commissioner.”

The EU’s annual budget is usually agreed by the Council and Parliament in the fall.

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