Saturday 14. December 2019
#158 - March 2013

 

Fighting over the European Multiannual Financial Framework for 2014-2020

 

After twenty-six hours of negotiations, the Heads of State and Government sealed an agreement on European Union finances for 2014 to 2020.


At the end of the European Council meeting on 7-8 February, there was a new Multiannual Financial Framework (MFF) providing for a total commitment appropriation of €960 billion (i.e. 1% of the EU’s GDP) and for €908.5 billion (i.e. 0.95% of EU GDP) payment appropriation. The commitment appropriations take into account contracts for which payments may be spread over several years, while the payment appropriations concern only the amounts paid during the current budget year. This explains the difference between the amounts of commitment appropriations and payment appropriations.

 

The total cost of the MFF therefore comes in slightly under the €973 billion commitment appropriations proposed by European Council President Herman Van Rompuy in November 2012. The European Commission’s proposal had been even higher, in the region of an extra €100 billion (totalling €1060 billion), while the amount fixed for the period 2007-2013 had been €1005 billion. For the first time in EU history, the Heads of State and Government voted for a reduction in the public funds allocated at the European level. The driving force behind this new direction was the United Kingdom which, like a number of other countries, managed to hold on to its own rebate, together with Germany, Sweden and the Netherlands.

 

Under the subheading “Cohesion”, the funds destined to finance the EU’s regional policy will be reduced by 10% compared with the amount allocated in the preceding multiannual framework . This will happen, even though a new recipient country will be added to the Cohesion Fund’s beneficiaries: Croatia is currently getting ready to become the 28th member of the EU as of 1 July, and had been involved in the negotiations. The positive elements under this heading include the creation of a youth employment initiative which will be allocated €6 billion. The major beneficiary of the cohesion policy will be Poland, which can look forward to receiving more than €70 billion during the period 2014-2020. Awarded a total of €106 billion, Poland will thus be the recipient of the largest net amount of European funds. The Common Agricultural Policy will also have to function with 10% less than in the current financial framework. Even so, the heading “Agriculture” will remain the largest item in the European budget for the next seven years, with a total of €373 billion. Heading 3 “Security and Citizenship” (€15 billion) and Heading 5 “Administration” (€62 billion) will increase by 27% and 10% respectively. Heading 4 “Global Europe” will remain steady at around €58 billion.

 

There are, however, long-term investments in infrastructure projects (transport, energy, telecommunications) which have been revised downwards in comparison with the last proposal in November. It is true that there is a significant increase compared with the preceding period (€125 billion as compared with €91 billion) under the heading “Competitiveness for growth and employment”. But based on previous European discussions confirming the willingness to make an overall rectification of Europe’s economic situation, a much larger sum had been anticipated. However, the previous declarations were redefined by the political realities at national level, and it was the latter that ultimately defined the collective choice made by a European Council composed of nationally elected political representatives.

 

After all that, nothing has yet been finally decided. In the next few days, negotiations will start with the European Parliament which, for the first time in the history of the European Union and following the entry into force of the Treaty of Lisbon, will have the power to vote on whether or not to accept the framework budget. An absolute majority of MEPs is necessary to confirm the Multiannual Financial Framework. Immediately after the agreement by the 27 Heads of State and Government on 8 February, the leaders of the four parliamentary groups (EPP, S&D, Liberals, Greens) stated their intention to seek to renegotiate the package. The MEPs will therefore have to decide between rejection of an MFF that does not go far enough and the uncertainty that would accompany its failure. The prospect of renegotiating the budget year-on-year is not an attractive one, and runs the risk of blocking other essential progressive initiatives, especially those needed to redefine the relations between the Member States, not just inside the Eurozone but also between Eurozone members and non-members.

 

Stefan Lunte

COMECE

 

Translated from the original text in French

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