European Union finance ministers approved a €7.3-billion increase in the bloc's spending for 2013 on Tuesday (14 May), as part of a deal to unblock talks on the EU's next long-term budget.
The cash will be used to cover unpaid bills for EU-funded infrastructure projects, and was a precondition for the European Parliament to begin talks with governments to finalize the 2014-2020 budget, worth nearly €1 trillion.
"With a view to securing the multi-annual budget, we agreed the spending increase for 2013," said Michael Noonan, Ireland's finance minister who chaired the talks.
It represents a rise of 5.5% on the original budget of €133 billion for this year, bringing overall spending to €140.3 billion.
But that figure could increase by a further €4 billion, after governments agreed to address the European Commission's request for an overall rise of €11.2 billion in two stages, with a second increase scheduled after the EU summer break.
The conclusions of the ministerial meeting say that the second payment for topping-up the 2013 budget would be made “at a later stage in parallel with the conclusion of the talks on the EU's multi-annual financial framework”, jargon for the 2014-2020 budget.
Parliament sticks to its guns
On Monday, government and Parliament negotiators held their first formal talks on 2014-2020 budget.
The Parliament is not expected to demand changes to the overall spending limit of €960 billion agreed by EU leaders in February.
But lawmakers want more power to move unspent money from one budget line to another, and a legal review of the spending levels after EU elections in 2014 which could increase spending if Europe's economy improves.
EU officials hope to reach a deal on the budget well before the end of this year to allow enough time to adapt EU funding programmes to the new rules before they enter force in 2014.
MEP Ivailo Kalfin, member of the European Parliament Budget Committee, and one of the two Parliament rapporteurs on the 2014-2020 budget, told EURACTIV that the finance ministers' decision was a “no go”.
Kalfin said the €11.2 billion sum was “legally due” and slammed the attempt to make the outstanding amount of €4 billion conditional on the European Parliament's consent over the 2014-2020 budget. He also criticised the Irish presidency for what it called “lack of commitment and energy” in steering the debates.
The European Parliament has recently warned that the inter-institutional negotiation of the 2014-2020 budget could be frozen in the absence of “absolute guarantees” that the €11.2 billion topping up the 2013 budget will be paid, Kalfin said.
Conservative MEP and former European Commission Chief Accountant Marta Andreasen, said in a statement: "It seems bizarre to me that Germany, renowned for its strict approach to finances now wants to reward EU institutions, who throw taxpayers' cash around like confetti, with an initial € 7.3 billion top up and more to come.
"When the European Commission can snap its fingers at compliant MEPs and Finance Ministers, and instantly obtain vast amounts of cash it sets a terrible precedent and worse, makes a joke of the Heads of State summit agreement on the 2013 Budget.
"What isn't funny is the price to be paid by this action. European citizens, already suffering harsh austerity, will once more have to pick up the bill."
Richard Ashworth, the leader of the UK Conservative MEPs, said: "If this measure is finally agreed next week between Parliament and Council, it should mean Britain achieving its key goals for the long-term budget - including the Prime Minister's historic deal for the first ever budget reduction. We should see the seven-year budget fall by 3.3 per cent and a lid firmly put on the idea of the EU raising its own funding through own-resources taxation.
The EU's 2013 budget was agreed in December 2012. It was set at €132.8 billion - a 2.4% increase over 2012, barely covering inflation.
But this amount is well below the European Commission's request. An extra €9 billion is needed for refunding payments made on cohesion - or development projects in the EU's poorer regions - and an extra €2.2 billion, to cover needs in practically all other areas of the budget, with the exception of administration, where no additional requests have been made.
The 2014-2020 budget was agreed at the level of heads of state and government on 8 February, but still needs approval from the European Parliament.
The draft budget for 2014-2020 is slimmer than its predecessor. It was scaled down to 1% from 1.12% of EU gross national income. It is the first net reduction to the EU budget in the bloc's history.
- 20 May: Parliament, Council and Commission to hold talks on the 2014-2020 budget
- 1-4 July: European Parliament to vote on the 2014-2020 budget
- Commission: Press Release, Ecofin meeting on 14 May