It was a diplomatic masterpiece. With the European Union budget negotiations threatening to break down during the EU summit in mid December, German Chancellor Angela Merkel -- making her debut on the European stage -- came up with a breakthrough proposal. All agreed and the EU, after months of haggling,  had a budget for 2007 to 2013.

But on Wednesday, 541 of 673 members of the European Parliament voted against the budget. The €862 billion package, it said, did not include enough money for security, investment and job creation programs, or for combating terrorism, among other concerns. The vote to torpedo the budget, though, is also the next round of a year-long power struggle which sees the parliament fighting to gain more say in budget negotiations. "The bazaar in Darussalam is more transparent than the haggling of the government heads," EU parliamentarian Markus Ferber, of the conservative Christian Social Union, told the Süddeutsche Zeitung. The parliament will now enter into negotiations with Wolfgang Schüssel, chancellor of Austria and current holder of the EU's rotating presidency, to find a way out of the impasse.

Schüssel also raised eyebrows across the 25-member club by repeating his demands for a European Union tax as a way to prevent the perpetual bickering over EU finances. "Europe needs a strong way of financing itself," he said in a speech to the European Parliament in Strasbourg. He specifically mentioned possible taxes on international financial transactions and airline tickets or kerosene.

What for many may seem a return to the EU chaos of last year is actually a positive development, the center-left Süddeutsche Zeitung reassures us on its editorial pages on Thursday. "The intervention of the people's representative is not gratuitous but rather necessary. Europe's multi-billion budget can only get better if the parliament helps change it." Specifically, the paper points out that the government heads were anxious to come to any sort of agreement in December to finally put the debate behind them. The result is a budget with limited funding for programs that might help Europe end mass unemployment and improve research and education. The parliament doesn't want to chuck the budget entirely. Rather, it merely wants to ensure that it has a say in how European money is spent throughout the entire budget period. And to increase its power. "The parliamentarians have discovered the budget as a vehicle for their political offensive."

The right-leaning daily Die Welt more or less agrees. It too argues that the "EU budget compromise for the years 2007 to 2013 is much worse than its reputation." The excitement was merely the result of having finally come to an agreement. "The European Parliament has now rejected the budget compromise. That's a good thing. In the end, the parliamentarians, in negotiations with the European Commission and the EU Council, will only be able to force through cosmetic corrections. But the governments have been warned: The standard horse-trading, that often purchases political agreement with absurd expenditures, will no longer be possible in future negotiating sessions."

Finally, the Frankfurter Allgemeine Zeitung outlines the rather impressive day had by the parliament. Not only did it strike down the budget, but it also struck down a controversial proposal to liberalize European harbors  and set up a committee to investigate CIA flights in Europe. As far as the budget goes, the paper argues, the parliament was not wrong. But if it expects the expenditures foreseen by the agreement to be increased, "this is little more than daydreaming."

--Charles Hawley
11:45 a.m. CET

It could be the Palace of the Republic's last chance to avoid the wrecking ball. On Wednesday, the German parliament, likely for the last time, will vote on whether to rip down the former East German parliament building -- which has blighted the center of Berlin in copper-colored ugliness since the 1970s. Indeed, the containers that will take away the 180 meter long colossus are already on site, ready and waiting. There are those in Berlin who would like to see the hulk stay where it is -- some argue it is a valuable piece of East German history, others point out its use as an alternative event site, and still others point to the lack of definitive plans for the site once the "palace" is gone. Indeed the vote in the German parliament, the Bundestag, on Thursday is a last minute plea for a demolishment reprieve sponsored by the Greens and the post-communist Left Party.

As it happens, the final death throes of the palace are going largely unnoticed in the German press -- hardly surprising given the almost monthly obituaries that have been written for the structure over the years as its demise approached ever closer. Indeed, even the New York Times seems to have been holding a journalistic vigil for the building with several articles on the building in recent years.

But the Süddeutsche Zeitung on Thursday goes all out with a full-page article on its vaunted Page Three and dedicates its lead editorial to the Palace of the Republic. First and foremost, the paper seems interested in clarity. The demolition of the building will cost €12 million -- and for the moment the only thing it will be replaced by is a small meadow. Why? Because those who would like to see the historical Berlin Stadtschloss, or city palace, rebuilt -- and there are plenty of them -- have yet to come up with either a clear concept for what the building might be used for, nor do they know how it could be financed. Berlin itself has refused funding the potential white elefant. ("A parliamentary expert commission developed the idea of a "Humboldt Forum" -- a weighty name for something that could more honestly be called 'center for everything that we don't have a home for.'") The paper goes on with a grocery list of problems with the concept of rebuilding the Schloss.