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The EU Budget: Institutional Change and Austerity

Giacomo Benedetto

The Lisbon Treaty, ratified in 2009, modified the rules for agreeing the European Union's budget more radically than any other treaty since 1975. In the autumn of 2010, an immediate effect of this change was a veto of the annual budget for 2011, the first instance of a budget veto since 1985. The paper finds that the European Parliament lost and the Council won not only in notional power but in the budgetary funds voted. Politicians failed to understand their powers under the new arrangements amid a coincidence with the new age of austerity, which pushed the Council to favour further cuts.Together, these formed focal points sufficient to disrupt budgetaryconsensus that had been hitherto path dependent. The paper compares the events of budgetary breakdown in the autumn of 2010 with the same cycle a year later that led to the budget of 2012. It also compares the budgetary spending approved for the financial year of 2010, before the entry into force of the Lisbon Treaty, with the amounts approved in the following two years.

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