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The European Parliament is in 3 locations. Does it cost 10% of its budget?

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Pagella Politica, Italy

13 March 2019, Updated: 20 March 2019

On September 27th, the MEP from Italy’s Five Star Movement Marco Valli published an analysis on Five Star’s blog criticising the European Parliament’s division into three locations. According to Valli, the fact that the Parliament’s offices are located in Brussels, Strasbourg, and Luxembourg brings an enormous additional cost to taxpayers. According to the MEP, the extra cost amounts to more than 200 million euro a year. This is 10 percent of the Parliament’s total budget. We checked, and it seems that it’s less costly.

The three seats in European treaties

The division has its roots in the history of the European Coal and Steel Community, and any change would appear to be blocked by the potential veto of France.

Protocol 6 of the Treaty on the Functioning of The European Union (TFEU) states that “the European Parliament shall have its its seat in Strasbourg where the 12 periods of monthly plenary sessions, including the budgetary session, shall be held. The periods of additional plenary sessions shall be held in Brussels. The committees of the European Parliament shall meet in Brussels. The General Secretariat of the European Parliament and its departments shall remain in Luxembourg”.

Division into three different seats therefore has its legal basis in European Union treaties. With protocols having the same legal value as treaties, the only way to change this situation is to follow the treaty revision procedure, but this requires a unanimous vote by member states.

The cost of the three seats to the European Parliament budget

According to the institution’s own data, the European Parliament’s budget for 2018 came to around 1.95 billion euro. 44 percent of the budget was used for costs related to staff and civil servants of the Parliament.

However, this estimate of nearly 2 billion euro includes no distinction of costs for each location. For example, spending on travel, conferences and meetings also covers travel between the three locations. At the same time, differences in expenses covering movement between Brussels, Strasbourg and Luxembourg, and those for other types of travel, are not specified.

It is therefore not possible to directly estimate the cost of individual locations. We can, however, look at the savings brought on by centralising the parliamentary functions in a single location.

The European Court of Auditors’ study

In 2014, the European Court of Auditors tried to estimate the savings that would be brought about by centralising the activities of the Parliament in Brussels. This was previously attempted in various other studies (synthesised in Table 1).

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Table 1: Annual savings estimated by three different studies in the event of centralisation of European Parliament activity in one or two seats - Source: European Court of Auditors

In 2002 it was estimated that centralising activity could bring annual savings of 203 million euro, a figure similar to that cited by Valli. Nevertheless, this estimate is now obsolete because it still includes rental costs for the Strasbourg buildings, which were later bought by the European institutions.

If we look at the latest available report on the topic (published in 2014), we discover that the annual savings from centralisation would be significantly lower than the 200 million cited by Valli.

The amount saved is in fact estimated at a maximum of 127.2 million euro a year – in the case of all activities being transferred to Brussels and new offices being purchased in the city – and a minimum of 97.4 million, if the offices are rented. However, on top of this annual total is a more substantial one-off economic benefit, depending on the decision regarding the sale and purchase of the European Parliament buildings in the three current seats.

In the case of buying new offices in Brussels and selling those in Strasbourg, there would be savings and gains equal to 395.9 million euro. If a decision was made to rent offices in Brussels, avoiding the need to construct or buy a new building in the Belgian capital, the one-off economic benefit would amount to 1,092.2 million euro.

However, the European Court of Auditors stresses that the potential economic benefits related to centralisation – especially those deriving from the sale of buildings at market price – are suggested by variables which could change with time.

The burden of decentralisation on the European Parliament budget

In 2018 – as we have seen – the planned expenditure of the European Parliament was around 1.95 billion euro, which, according to a recent estimate from the Parliament itself, would equal the cost of one sandwich per year for each European citizen. A cost of 127.2 million annually – mentioned above – would cost today’s EU Parliament budget 6.52 percent. In 2014, when the Court of Auditors made their estimates, the total cost incurred by the European Parliament amounted to about 1,756 billion euro. The cost of decentralisation was thus 7.24 percent of the total budget.

Both of these percentages are therefore divergent from the 10 percent suggested by the Five Star MEP.

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