2013 EU budget
Council adopts position at technical level: 2.79% rise on 2012
By Gaspard Sebag | Friday 06 July 2012
The Council of the EU is set to reduce the Commission’s draft 2013 EU budget by €5.2 billion in payments to €132.7 billion in order to limit the burden on national public finances. On 5 July, the Council’s Budget Committee agreed to limit the increase in payments to 2.79% compared to 2012, well below the 6.85% boost requested by the EU executive but above inflation (1.9%). In relation to its size, Heading 4 (foreign affairs) takes the biggest cut: -€1.03 billion in payments compared to the Commission’s draft and -9.75% compared to this year’s budget. Despite the fact that it has not yet been formally endorsed, the package will not be reopened again, according to a well-informed source.
Struggling to keep a lid on public expenditure, member states decided to focus on growth enhancing measures, in particular in Heading 1 (sustainable growth), in the 2013 EU budget. Clearly, Commission and Council do not see eye to eye on the amounts needed. The EU executive requested a 17.8% rise in payments for competitiveness (Heading 1a). Member states knocked that back to +1.5% (€11.66 billion in payments), shaving off €1.89 billion from what the Commission deemed necessary next year.
Budget Commissioner Janusz Lewandowski’s spokesperson said the EU executive is “bemused” that the Council proposes at technical level to reduce “in such a drastic way and without explanation” investment expenditure for research and innovation, infrastructure and education (Heading 1a) only a few days after the European Council adopted a ‘Compact for jobs and growth’, putting the spotlight precisely on these areas.
Cohesion (Heading 1b) also underwent a cut: -€1.6 billion compared to the Commission draft but still up 8.07% compared to this year and standing at €47.38 billion. The strong percentage increase is no doubt due to the lobbying of ten countries (plus Croatia), which argued in May that the Commission’s proposed rise for this heading was “justified and strongly needed”.
FOREIGN AFFAIRS SACRIFICED
No country was willing to put its neck out to defend foreign affairs funding (Heading 4), which was sacrificed on the altar, dropping to €6.28 billion in payments in the Council’s position. Since every heading was to contribute to the slimming-down exercise, agriculture (2) is not exempted, shedding €0.49 billion compared the EU executive’s draft budget for a total of €57.47 billion, which represents a 0.77% rise on this year. Administrative expenditure also takes a hit, with all institutions bar the Parliament contributing, and ends up with a below-inflation increase: +1.47% to €8.40 billion. Member states did not budget the potential needs in case the Court of Justice of the EU forces them to fork out the +1.7% salary adjustment for EU officials based in Brussels for 2011 that they refused to pay in December. In Heading 3, the smallest by far in size, the significant rise in Subheading a (freedom, security, justice) is compensated by a similar decrease in Subheading b (citizenship).
The negotiations amongst member states were described as the hardest in the current multiannual financial framework (2007-2013) by one participant. The United Kingdom, Germany, France, the Netherlands and Finland were said to have referred constantly to the ‘letter of five’ signed by their leaders in December 2010 to justify their request for a real-terms freeze in next year’s budget. Non-signatories Sweden and Austria were also pushing for restraint. The final figure (+2.79%) is a compromise between these net contributors’ position and that of the ‘ten plus one’ cohesionist group.
The cut in real terms (+1.27% to €149.78 billion) effected to commitment appropriations will certainly anger Parliament, which already found it unacceptable that the Commission had allowed only for a 2% increase in its draft. The majority of the increase in commitments for next year is absorbed by cohesion, where the overall level is the same as in the Commission’s draft budget: +3.3% to €54.49 billion.
The informal agreement reached at technical level will have to be approved, on 11 July, by the Committee of Permanent Representatives (Coreper) and formally adopted later this month by the Council. n