Budget procedure

The amendments to the budget procedure have been maintained in the new text. Here, the particular area of concern was that, if the European parliament rejected a budget, even if the Council had approved it, the parliament could still ask the commission to submit a new budget.

This provision is highly significant, as it gives the federal parliament the ultimate power on the spending plans of the commission, enabling it to over-rule the Council and, ultimately the member states.

The Irish presidency, in its discussion document (CIG 75) recognises that there are problems allowing this to go through – reflecting Gordon Brown’s "input" last Tuesday. It writes, "on the basis of discussions to date it appears that, while the proposal is acceptable to many delegations, it will not attract sufficient consensus." The difficulty, it sees, in maintaining the "inter-institutional balance" – i.e., the division of powers between the Council and the parliament.

However, it continues, the proposed changes to other aspects of the Union’s financial arrangements, "make it impossible to maintain the existing balance in the precise terms in which it is currently defined".

This is a heavily coded marker which says "watch this space". There is here, clearly, a major disagreement, and one which is going to be very difficult to resolve.