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29/09/2016

Commission redrafts 2013 EU budget with the same numbers

EU Priorities 2020

Commission redrafts 2013 EU budget with the same numbers

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The European Commission submitted a new proposal yesterday (26 November) for the European Union's 2013 budget, just days after the bloc's leaders failed to agree a separate long-term spending plan for 2014-2020.

The revised 2013 budget blueprint is virtually unchanged from the Commission's original proposal, which earlier this month failed to win the joint backing of EU governments and lawmakers needed for approval.

European Parliament negotiators boycotted talks with EU governments to finalise the €137 billion budget for next year, after member states refused to first approve a last-minute request for more funds in 2012.

Many northern European countries that contribute most to the bloc's budget have been angered by demands for above-inflation increases in future EU spending, which they say fly in the face of budget cuts and austerity policies being implemented at home.

Failure to agree on the 2013 budget created uncertainty in future EU finances, amplified last Friday when leaders were unable to reach a compromise on a budget framework for 2014-2020, delaying a decision until next year.

A revised 2013 budget plan must now be agreed by the end of this year to avoid triggering an arrangement where the total for 2012 is rolled over and paid out in 12 monthly instalments, which would cause chaos in several areas of EU spending.

But governments are likely to remain opposed to the proposed €137.8 billion limit on EU payments for next year, which is only €126 million less than the Commission's original plan and represents an increase of almost 7% from 2012.

Negotiators from the European Parliament support the Commission's 2013 blueprint and its request for an extra €9 billion in funding for this year, which it says is needed to meet funding commitments for EU public works and education programmes.

The 2013 budget dispute has extra significance in that if there were to be no deal on the EU's long-term financial framework by 2014, next year's spending would be the basis for subsequent annual budgets until agreement was reached.

Unlike national governments, the EU cannot borrow to finance a deficit and must ensure its books are balanced each year.

The European Union agrees in advance its maximum future spending levels for all areas of policy and administration in seven-year budget plans. Actual spending is then fixed annually in a budget for the year ahead, with later revisions to cover any unforeseen spending.

About three-quarters of the bloc's annual budget is currently spent on agricultural subsidies and motorways, bridges and other infrastructure projects in poorer eastern and southern European member countries.

Background

In the EU budget for 2012, coffers ran empty for programmes that include priority areas such as education, youth and research.

The Commission said it was not surprised by these developments.

When the EU budget for 2012 was adopted in November 2011, Budget Commissioner Janusz Lewandowski pointed out that the Parliament and the Council had agreed on a budget much lower than the one proposed by the Commission.

In April, the Commission defended plans to increase the bloc's spending for 2012 by 4.9%, arguing that the proposal struck a balance between austerity and the need to boost growth. The proposed 2012 budget was of €132.7 billion, but the one that was eventually adopted was €129.1 billion.

A revised 2013 budget plan must now be agreed by the end of this year to avoid triggering an arrangement where the total for 2012 is rolled over and paid out in 12 monthly instalments, which would cause chaos in several areas of EU spending.