EU budget deal may face rough ride in parliament

BRUSSELS - European Union leaders may think they have settled the bloc's 2014-20 budget but it is the European Parliament, angry at the first ever cut, that now has the final say and early signs point to tough talks ahead.

Stung by the agreed three percent reduction in EU spending over the next seven years, parliamentary leaders were quick Friday to reject the hard-won deal, saying it would undermine Europe's future and could even be illegal if it resulted in Brussels running a budget deficit.

Under the core 2009 Lisbon Treaty, the European Parliament is now a party to the EU budget process, with lawmakers required to sign off on the figures EU leaders agree. In the heat of the moment, however, that aspect tends to get overlooked and the tone of the press commentary Saturday too was very much as if the deal had been done and that was it.

But the European Parliament has to vote on the 2014-20 budget in July and significantly, EU President Herman Van Rompuy was careful when he announced the accord after marathon talks Thursday and Friday to note that the hard-won deal still needed lawmakers' approval.

It was "perhaps nobody's perfect budget," Van Rompuy conceded, but "there is a lot in it for everybody" and he urged MEPs to do their duty towards Europe.

The budget was not "an accounting exercise" and before rejecting it, lawmakers should think "very carefully" about the potentially huge implications for the economy, jobs and future prosperity."

"I hope that the European Parliament will meet its (responsibilities)," he added, in the same way the 27 EU leaders had met theirs by agreeing to compromise on their differences.

Parliament head Martin Schulz, however, had repeatedly insisted that the cuts were unacceptable to most lawmakers.

Schulz made his position clear to EU leaders as they began the talks and then warned even more bluntly afterwards that he could not go along with a budget which would likely result in a deficit - barred under EU law, but familiar territory for most member states.

He was backed up Friday when the leaders of the four biggest parties in parliament rejected the accord outright.

The European Parliament "cannot accept today's deal in the European Council as it is. We regret that Van Rompuy did not talk and negotiate with us in the last months," they said in a joint statement.

An EU source recognized the problem.

"The best case scenario is that parliament gives its consent" to the current proposal but that seems unlikely, the source said.

"The worst case scenario is that parliament says 'No, we will never agree.' (In that case) there would be no budget or (EU leaders) would have to come back to change it," the source said.

In between, there "are very many scenarios," the source said, adding: "We will have to find an understanding."