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Britain and other European Union countries put their weight behind Franco-German calls for tougher eurozone rules at a summit today (29 October), agreeing on "limited" changes to the EU's main treaty in return for a cap on the EU budget.

Officials struggled to deliver the message that legal tricks could accommodate both Germany's push for treaty change and conflicting calls from several other countries which had rejected the idea. Regarding treaty change, the key word is "simplified", officials explained. A simplified provision, enshrined in Article 48, Section 6 of the Lisbon Treaty, allows member countries to unanimously adopt a decision amending all or part of the main elements of the Treaty on the Functioning of the EU (TFEU), which governs how the Union carries out its work. Such a procedure would avoid the need to call a constitutional convention, experts explained. In addition, the European Parliament would only be "consulted" instead of enjoying full voting rights as part of the normal co-decision procedure. The changes to the treaty are to be settled by mid-2013, before the expiry of the present emergency fund agreed earlier this year to deal with crises such as the one that hit Greece. The objective is to replace that with a permanent mechanism. The simplified treaty change procedure will not enter into force until it is approved by member states in accordance with their constitutions. Most EU countries are expected to ratify the decision by a simplified procedure in their parliaments. As for Ireland, it remains unclear whether a change effected in this way would require another referendum.

UK Prime Minister David Cameron appears to have been instrumental in forging a deal, lending his backing to Franco-German calls for treaty change in return for keeping a lid on the EU's 2011 budget. 11 member states, including Britain, France and Germany, will send a letter to the European Commission and Parliament today saying that their plans to increase the EU budget by 5.9% in 2011 are "especially unacceptable at a time when we are having to take difficult decisions at national level to control public expenditure". The letter was signed by the leaders of the UK, Germany, France, the Netherlands, Sweden, the Czech Republic, Denmark, Austria, Finland, Slovenia and Estonia. The bloc's finance ministers had earlier voted for a limited increase in the EU budget of 2.9%. "We are clear that we cannot accept any more than the 2.9% increase proposed by the finance ministers," the leaders say in the letter. Cameron argued that a planned increase in the EU budget would cost his country's taxpayers the equivalent of one billion euros. The 2.9% rise would still cost them £435m (500m euros). Parliament to fight back By agreeing to cap the budget, EU leaders set themselves on a collision course with the European parliament, which has the power to approve or reject the proposed budget. Negotiations between the European Parliament and the Council, which represents the 27 member countries, over the EU's 2011 budget kicked off on 27 October (see 'Background'). "If Cameron is prepared to give up the British rebate [...] then we can for sure discuss a reduction of the budget," said Martin Schulz, leader of the Socialist & Democrats group in the European Parliament, speaking to EUX.TV, the European policy news channel powered by EurActiv. "The European budget is not to be compared with national budgets," said Schulz. "There are no own resources. We have no European taxes. We have no own money. It is money coming from the member states. We can make no debts. The British budget must be reduced because there is enormous debt. Europe has no debts," he said.

Europe's Socialist leaders have proposed a ‘growth pact' as an alternative to the ‘competitiveness pact' originally proposed by France and Germany as a solution to the bloc's economic woes. Greek Prime Minister George Papandreou, Austrian Chancellor Werner Faymann and most of the continent's social democratic leaders, many of whom currently sit on opposition benches in their parliaments, including French Socialist leader Martine Aubry and Germany's head of the SPD, Sigmar Gabriel, met at a summit in Athens to co-ordinate their strategy ahead of an EU summit where a ‘comprehensive response' to the eurozone crisis is to be finalised.

The centre-left leaders endorsed a plan that still backs austerity, but alongside it the introduction of a financial transactions tax that they say would deliver €250 billion a year to European coffers that could be invested in green technologies and infrastructure.

EU countries have agreed to proceed with Albania's application for membership of the European Union, a first step in a long process towards possible membership of the bloc, EU diplomats said.

Background: Albania applied for EU membership in April 2009. In July, the EU Council stated that it would return to the country's application once the Albanian election procedure had been completed. Ever since the June national elections, the two main players, the governing Democratic Party of Prime Minister Sali Berisha and the Socialist party and main challenger Edi Rama have kept on accusing each other of fraud (EurActiv 30/06/09).  In its latest report on Albania, the European Commission stressed that Tirana needs to make progress, particularly on the rule of law and the fight against corruption, as well as the proper functioning of state institutions ( EurActiv 15/10/09). 

Ambassadors from the 27 EU states decided at a meeting in Brussels to ask the European Commission to prepare an assessment of Albania's readiness to start membership talks, the diplomats said.  The decision is expected to be formally approved by EU foreign ministers at a meeting in Brussels on 16 and 17 November. 

The nightmare scenario of another referendum on a change to the EU treaty in the Netherlands, five years after the country rejected the bloc's proposed constitution, could return to haunt European leaders, with the hard-right Dutch Freedom Party (PVV) of Geert Wilders on Tuesday (2 November) announcing it is considering proposing just such a vote.

MP Louis Bontes of the anti-immigrant PVV, which is part of the governing coalition pact, said his faction in the parliament may push for a referendum if the penalties for countries in breach of new EU fiscal rules are not strict enough.

The left-wing Socialist Party, one of the leaders of the No campaign in 2005 against the EU constitution, claiming that the dud EU charter had favoured the interests of businesses over citizens, has already endorsed the idea that another referendum should be called. On Friday, MP Harry Van Bommel, the party's spokesman for EU affairs and the deputy chair of the parliament's standing committee on the same subject, said that if a treaty change is approved by the European Council, it will call for a referendum. "We are very happy to have the support of the PVV in our push for a referendum," he told EUobserver, "and that they are willing to look into the issue as well." Mr Van Bommel was keen to stress that his party's opposition to the treaty change was for different reasons to that of the PVV. "They are more concerned that we not pay out to poorer countries whereas we are more worried that the proposed changes limit a nation's policy space in the social arena," he explained.

The centre and left of the European Parliament have robustly condemned the outcome of the European Council, complaining that the interest of the bloc as a whole has been sidelined in favour of national interests. It is common for the groups in the parliament to criticise the results of European summits, but the missives issued the afternoon following the meeting were abnormally trenchant.

The Party of European Socialists "condemned" the result, attacking the "conservative leaders" who hold a majority in the Council. "The Conservative leaders are fundamentally mistaken. Yet again they have failed to take control of the crisis," said Poul Nyrup Rasmussen, the former Danish prime minister and leader of the PES. "The reaction of the Markets illustrates this clearly." Mr Rasmussen pointed to the overnight downgrading of Irish bonds by the Moody's credit agency as signifying that the investors were unconvinced by the council's plan. He warned that the EU Council had put itself in "direct conflict" with the parliament over its refusal to countenance any move towards debt issuance at the EU level. "The German, British, Swedish and Dutch Governments formed a roadblock to progress on the eurobonds issue. So blatantly putting national interest before European recovery is short-termist and lacking in leadership," he said.

The European Parliament must be consulted on the treaty change, but it has no co-decision power under the 'simplified revision procedure' - the new method the EU leaders are using to deliver the limited treaty change while avoiding any national referendums. But, depending on the fine print of how the permanent bail-out fund is constructed, it may have approval powers. The EU prime ministers and presidents at the summit did not take any decisions on the details of the fund. According to a parliamentary legal expert, if the European Council itself develops the mechanism on an 'intergovernmental' basis, and the fund is similar to the existing €440 billion rescue mechanism, which involves a series of loan guarantees by member states, then the chamber will only be consulted, as with the treaty change. But if the EU is asked to develop and present a proposal, or if it involves any direct EU funds as well as national loan guarantees, then "this is part of the community method, and the parliament has co-decision powers". The Greens also said that the permanent crisis mechanism "will not be enough to get Europe out of the crisis."

The European Parliament has given a positive overall verdict on last year's efforts by Croatia and Macedonia to qualify for EU membership. In resolutions debated and approved yesterday (10 February), MEPs also took note of the limited progress made by Turkey in meeting EU membership criteria.

Concerning Macedonia, MEPs backed the Greek government's suggestion of a "symbolic and motivational target date of 2014" for the EU accession of Western Balkan countries, in a resolution drafted by Slovenian Zoran Thaler (Socialists & Democrats) and adopted by 548 votes to 45, with 35 abstentions.

European UnionEuropean Parliament: Resolution on the 2009 progress report on Croatia European Parliament: Resolution on the 2009 progress report on the former Yugoslav Republic of Macedonia European Parliament: Resolution on Turkey's progress report 2009

New proposals on joint economic governance put forward by European Commission President Jose Manuel Barroso and EU Council chief Herman Van Rompuy on Monday (28 February) have failed to overcome resistance from some member states.

The Barroso-Van-Rompuy plan does contain a requirement that German-style 'debt brakes' be implemented across the eurozone, however. Resistance to this element comes from those who do not want to open the Pandora's Box of constitutional amendments this could entail. Opposition to the Franco-German pact also revolved around the proposal that countries that maintain inflation-indexed wage systems abandon this practice. Belgium and Luxembourg in particular were resistant.

As key figures on the left in Europe, including within the commission itself, have begun to issue their misgivings over the path of austerity chosen by the EU as a response to the crisis, the commission warned social democrats that throughout the crisis, they have also backed this process. Last week, Greece's EU commissioner, Maria Damanaki, publicly distanced herself from EU austerity, saying it is leading to "social degradation." Former commission president Jacques Delors, a French Socialist, has also called the commission's recent Annual Growth Survey, a first step in the EU's new system of oversight of and intervention in national budgets, as "The most reactionary document ever produced by the commission."

MEPs on Wednesday (10 February) urged member states to open accession talks with Macedonia, a call backed by the new enlargement commissioner, Stefan Fuele. In three separate reports, the European Parliament gave the thumbs up to progress made by Zagreb and Skopje towards EU accession, while Ankara's performance was deemed more modest.

The parliament urged member states to take a decision "at the summit in March 2010" and "expects negotiations to begin in the near future." Mr Fuele said the decision was not only in the interest of the Balkan country, but also of "strategic EU interest," since it would "enhance the EU perspective for the wider region" – a message he would convey to member states and Skopje. Slovenian Socialist MEP Zoran Thaler, the parliament's rapporteur for Macedonia, warned of the negative regional consequences of this stalemate, comparing the Western Balkans to a bicycle: fine as long as it's moving, "but if it stays still, everything falls over

France said yesterday (4 January) that a new media law passed by Hungary, which took up the EU's rotating presidency on 1 January, violated EU laws on press freedom, and called on other members of the bloc to take action against it.

In France, the law has drawn criticism from across the political spectrum, with the main opposition Socialist Party labelling it "a very bad sign for Europe and for the liberty of the press". The controversy over the media law has contributed to a growing cloud over Hungary's EU presidency. Budapest and Brussels have clashed several times since Prime Minister Viktor Orban rejected austerity measures, cut ties with the International Monetary Fund and opted for unorthodox fiscal steps to cut the budget deficit and boost economic growth. The European Commission announced on Monday that it was investigating the legality of crisis taxes imposed by Hungary's centre-right government on the telecoms, retail and energy sectors.