President of the Commission Jose Manuel Barroso sent a letter on 25 November to the Presidents of the European  Parliament and of the European Council on the political issues linked to the adoption of the 2011 budget. In order to help in this process, the Commission has drafted a new budget which 126.5 billion Euro in payments, an increase of 2.9% to 2010.

Following the debate on EU budget for 2011 held in the Parliament on 23 November, where MEPs reaffirmed their strong position in this issue, the Commission has fast-tracked a new draft in order to help Council and Parliament to reach an agreement before the end of the year and avoid working under “provisional twelfths”.

The main issues which led to the failure to reach an agreement and to the collapse of the conciliation procedure, were focused on defining modalities for inter-institutional dialogue in view of the adoption of the next Financial Framework, future own resources for the EU budget as well as the level of flexibility within the current Multiannual financial framework.

In President Barroso's letter to President Buzek and Prime Minister Leterme, the Commission calls on Parliament and Council to develop the modalities regarding cooperation on future budgetary issues as foreseen by the Lisbon Treaty, which means working together on the next Multiannual Financial Framework.

As already announced by President Barroso at the Parliament debate, the Commission has stated its intention to come up with proposals on the EU’s own resources by June 2011. Furthermore, the financing of the EU's new tasks stemming from the Lisbon Treaty and of the EU 2020 strategy will be examined with European added value being the cornerstone of future Commission's proposals.

As regards flexibility within the budget, Commissioner Lewandowski welcomed as a major step forward the announcement made by the Council about its agreement to establish a contingency margin of up to 0.03% of the EU Gross National Income (GNI) as a last resort instrument to react to unforeseen circumstances.