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On 26 October 2016, the Council informed the European Parliament that it cannot accept all its amendments for the 2017 EU budget, adopted the same day.

This triggers a three-week conciliation period starting on 28 October to allow the Council and the Parliament to bridge their differences by 17 November.

"I'm pleased to see that the Council and Parliament share the same objectives for the 2017 EU budget: to enable the EU to address the migration crisis, reinforce security, boost growth and create jobs. This makes me confident that we will be able to agree on the best possible EU budget - a budget that benefits EU taxpayers, European citizens and companies", said Ivan Lesay, state secretary for finance of Slovakia and President of the Council.

In the Council's view the main challenges in reaching a deal on the 2017 EU budget are related to the respect of:

• the EU's multiannual financial framework (MFF) for 2014-2020; the Parliament wants the level of commitments to be way above the MFF expenditure ceilings; this would seriously hamper the EU's ability to react to unforeseen needs
• the estimates of payments needs for 2017; the Parliament wants the level of payments to be above the needs estimates; this would force member states to provide contributions to the EU budget over and above what is necessary at a time when they are struggling to consolidate their public finances
• the agreement reached with the Council in 2015 on financing the European fund for strategic investments; the Parliament asks that this agreement be reopened; this would reduce the EU's financial leeway for meeting unexpected needs for research and other future orientated expenditure
• the EU institutions' commitment to reduce their staff by 5% by 2017; the Parliament wants to limit the reduction of its staff to a level that falls well short of this target; this risks undermining the credibility of the Parliament and of the European Union, as a whole
• the scope of the conciliation talks; the Parliament wants to discuss the annual EU budget and the mid-term review of the MFF as a package; this would have the effect of merging two files that are subject to very different decision procedures, and should therefore be dealt with as two separate sets of negotiations

Background

In its draft budget for 2017 the Commission proposed setting the total level of commitments at €157.66 billion and of payments at €134.90 billion.

The Council's position, adopted on 12 September, amounts to €156.38 billion in commitments and €133.79 billion in payments.

The Parliament asks for total commitments to be increased to €162.42 billion and total payments to €138.03 billion. This is €3.26 billion in commitments above the MFF ceilings.

As regards staff numbers, according to the methodology applied equally by the Commission to all institutions, the Council and the Commission will have reduced their establishment plan posts by 5.0% between 2013 and 2017; by contrast, the Parliament's staff reduction will amount to 1.8% during the same period. The three institutions undertook in December 2013 to decrease their staff numbers by 5% between 2013 and 2017.

Conciliation will also cover amending letter no 1 for 2017 which aims at increasing support to boost growth, create jobs and address the root causes of migration and at updating its draft budget to the most recent needs estimates for agriculture. Neither the Council nor the Parliament have yet taken a position on the amending letter.

Next steps

The conciliation committee will meet on 8 November and on 16 November. At the latter date an Ecofin/Budget Council will meet to provide the presidency guidance for the talks with the Parliament. If no deal is found by the end of the conciliation period on 17 November the Commission has to present a new draft budget for 2017.

• Draft EU budget for 2017
• Council position
• EU budget for 2017: Council calls on EP to draw the right lessons from 2016

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