MEPs approve long-term budget compromise

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Lawmakers have approved a compromise struck last week on the multi-annual financial framework, the EU's budget for 2014-2020.

The deal left unchanged the total amount if the seven-year budget which was set at €960 billion at an EU leadership summit in February.

But the Parliament succeeded in including more flexibility so that unspent money can be transferred from one year to the next, or to priority areas, rather than returning it to national budgets as is currently the case.

"The European Parliament was realistic. The EU budget is financed by national budgets. National budgets are in ruins. It was not possible to obtain higher figures,” said French centre-right MEP Alain Lamassoure, chairman of the budgets committee who headed the Parliament's four-member negotiating team in talks with Council representatives and the Commission.

MEPs said the budget invests in programmes that will help lift the EU out of its economic doldrums, including:

  • €3.5 billion for the Fund for European Aid to the most deprived, an increase of €1 billion;
  • An additional €200 million for research in 2014-2015;
  • An additional €150 million for the Erasmus programme in 2014-2015;
  • €50 million for the COSME Programme to help the competitiveness of smaller businesses for 2014-2015;
  • Funding for the new programme dedicated to youth employment for 2014-2020, whereas governments only guaranteed funding for the first two years.

“This comprise will not save Europe but it will finance the most pressing issues and will launch a timetable for getting out of the current crisis," Lamassoure said.

A new clause will also allow the budget to be revised in 2016 for implementation in 2017. In the context of this review, a process of reforming the financing of the EU budget will be launched in the autumn.

"This agreement on the overall legislative framework allows negotiations to continue in order to clarify the distribution of funds within each policy," said Lamassoure.

The final legally binding vote in Parliament will only take place when the €11.2 billion needed to balance the 2013 budget is confirmed by the Council. That will happen in September or October.

The autumn vote will focus on a large package of legal documents, including the regulation containing the budget, and about 80 other pieces of legislation needed to implement it.

It will also include an inter-institutional agreement over how the budget can be spent, including statements from the three EU institutions on "own resources", or self-generated revenue.

A high-level group will undertake a general review of the own resources system to deliver a proposal to put on the table ahead of the adoption of the next budget period starting in 2020.

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Tony Long, Director, WWF European Policy Centre said: “This was the definitive opportunity for the EU to align its budget with its 2020 environmental targets and address some of the biggest problems of our time: climate change, loss of biodiversity as well as unemployment and a stalling economy.”

He noted that instead of the patchwork of national pet projects with little or no consistency in addressing our environmental challenges and commitments, it would have been better to have a bold reallocation of EU money to sustainable rural development, low carbon innovation, developing countries and biodiversity.

Dutch Liberal MEP Jan Mulder, ALDE coordinator in the Budget Committee, added. "Parliamentary powers are limited because we can only say yes or no. However at this stage there's a dilemma, especially on own resources and the revision clause. Especially since the 2013 budget is a sword of Damocles. If the Council doesn't plan to release the final tranche of the amending budget until November how can we delay adoption of the MFF? "

UK Minister for Europe David Lidington added: “While there's still far too much money wasted on running the EU machine, the budget deal will prioritise funds on pro-growth programmes such as research and innovation and in helping to tackle youth unemployment."

“At long last the saga that was the negotiation of the MFF has concluded. The agreed €960 bn is still a massive figure but it represents, for the first time since multi-annual budgeting began in 1993, a reduction in the EU Budget,” said Conservative MEP Marta Andreasen.

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