EU set to miss deadline for budget overhaul plan

By Marcin Grajewski

BRUSSELS (Reuters) - The European Commission will miss a deadline for proposing a plan to overhaul the European Union budget this year because its president is still putting together his new leadership team, EU officials say.

EU leaders agreed four years ago that the Commission, the 27-country bloc's executive, would by the end of 2009 present ideas for reforming the budget, addressing issues such as high farm spending and a rebate that Britain receives from EU coffers.

The budget debate is always tough but will be especially hard now because of calls for a thorough overhaul which could affect British and French budget privileges. Any delay will limit the time member states have to resolve difficult disputes.

The proposal on the budget, which is worth some 125 billion euros (112 billion pounds) annually, has been postponed several times because of concerns the fierce debate around it could get in the way of ratification of the EU's Lisbon reform treaty.

The treaty has now been ratified, but EU officials say Commission President Jose Manuel Barroso has decided to put off making the budget proposal until next year.

Barroso, who was elected in September to a second five-year term, is now allocating jobs in the new Commission, which he says should be in place by the end of January.

"It will be up to the new Commission to make a proposal on the budget. It makes sense, as in this way the proposal will have a stronger mandate," said one Commission official.

Another official said Barroso did not want the budget debate to overshadow or complicate approval hearings in the European Parliament on nominees for the new members of the Commission.