Midterm budget review digs in EU’s hidden pockets

Kristalina Georgieva, Vice-President of the European Commission in charge of Budget and Human Resources, speaks at a press conference on 27 September 2016. [European Union]

As euractiv.com revealed on 12 January, the tweaks to the EU budget under the midterm review amount to a further disbursement of €12.7 billion currently hidden in EU coffers.

As expected, the European Commission waited for the Brexit referendum to announce its intention to review the EU’s seven -year budget for the period 2014-2020, also known as Multiannual Financial Framework (MFF).

Close to €13 billion comes from budget reserves, such as unallocated margins and special instruments under plans confirmed on Wednesday (14 September).

Midterm EU budget review falls victim to UK referendum

EXCLUSIVE / British Prime Minister David Cameron can already claim a victory ahead of the referendum, because the major event in the calendar of the Juncker Commission, the midterm review of the European Union’s 7 year budget, has been effectively cancelled.

No extra contributions from member states

Crucially, EU member states will not be asked to pay more than what they have already committed under the current multi-annual budget, which runs from 2014 to 2020.

Under normal circumstances, the midterm review would have offered a chance for the Commission to make changes to the budget, which was proposed and adopted under the previous EU executive, led by José Manuel Barroso.

However, changes to the budget appear minimal. Compared to the total of €960 billion for the seven-year period, the €12.7 billion will be distributed as follows:

  1. €2.4 billion will go to further boost growth and jobs via more money for highly performing programmes such as the extended European Fund for Strategic Investments (EFSI);
  2. €2.5 billion to support the ongoing work in the areas of migration, security and external border control, including the setting up of the European Border and Coast Guard, the EU Agency for Asylum, and the reform of the Common European Asylum System;
  3. €1.4 billion for the European Fund for Sustainable Development, under the ‘External Investment Plan’, which will support investments in regions outside the EU and will seek private partners to address the root causes of migration;
  4. There will be increases in the draft budget 2017 (€1.8 billion) and the technical adjustment of cohesion envelopes that will dedicate additional money to these priorities (€4,6 billion).

Together with the midterm review, the executive is proposing to simplify the rules under which member states and other beneficiaries receive EU money. The Commission is also proposing improving the ability of the EU budget to react quickly and adequately to unforeseen events.

The European Commission’s Vice-President for Budget and Human Resources, Kristalina Georgieva, said that this review is the start – not the end – of a drive to focus even more on results.

The tabled legislative proposals will now have to be agreed on by the European Parliament and the Council. The target is to secure agreement on as much of the package as possible by the end of 2016.

EU budget for 2017: Cohesion down, security up

Payments for cohesion are down by 23.94% in the 2017 draft budget compared to 2016, but payments for the heading “Security and citizenship” are up by 24.42%. The Parliament is yet to give its opinion on what looks like an unusual budget.

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