News
BackFollowing tough negotiations between Council and European Parliament, the EU Budget for 2011 was adopted this week. This was preceded by the annual theatrical thunder between both EU institutions including the also annually recurring question what would happen if no agreement could be reached. Whilst the public is well informed about the disagreements during the negotiations, hardly any light is shed on the question: what is the EU money used for?
The total volume of the EU Budget for next year is € 126.5 billion. An increase in expenditure of 2.91 percent. The European Parliament had originally demanded a 6 % rise in the EU budget. Why the EU's representation of the people demanded a higher volume of funds in spite of the strained public budget becomes only clear when one takes a closer look at the structure of the EU Budget:
In contrast to national budgets, the EU Budget is decided at seven-year intervals, the so-called Multiannual Financial Framework (MFF). The current framework covers the period 2007 to 2013 and sets out the expenditure for individual priorities. Economic changes have almost no impact on the EU Budget because the programmes agreed within the financial framework will be implemented, irrespective of whether the economy is up or down. In case the EU institutions agree a lower budget volume after a year, this has to be compensated in one of the following years to enable the implementation of the agreed programmes in accordance with the financial framework. Although on the one hand, the now agreed increase of the budget volume by 2.91 % helps the national finance ministers not to overstrain their Member State Budget 2011; on the other hand a greater rise of the EU Budget volume will be necessary in the following years to implement the EU programmes.
The EU Budget 2011 intends to assign € 41.7 billion to regional policy. This includes among others infrastructure projects and European Social Fund programmes. In particular the poorer EU regions have a great need to modernise their infrastructure, for example in the transport and energy sector, which can be speeded up by EU subsidies. In turn, the European Social Fund also focuses on projects to support workers and promote vocational and advanced training as well as on increasing the mobility of workers. Further € 11.6 billion will be made available for research projects, for "competitiveness" and partly also for infrastructure projects. € 8.1 billion have been allocated to the EU administration and € 7.1 billion to the new External Action Service.
However, at € 56.4 billion, the largest item of expenditure is the agricultural sector – about 44.6 % of the total budget. In particular the agricultural sector is often criticised for swallowing up a disproportionate amount of funds from the EU Budget. And indeed, the EU agricultural sector shows structural deficits, which result in the fact that large food companies receive vast amounts of agricultural subsidies whilst many of the small farmers are struggling without receiving almost any subsidies. The promotion of rural regions and people working in them is also greatly neglected.
Although the agricultural sector is the largest item of expenditure, the lower budget increase has almost only an impact on non-agricultural sectors such as regional policy or research. Because only their payments can be deferred to a subsequent year. In contrast, the agricultural sector consists mainly of subsidies or direct aid, which is paid each year and which cannot be deferred to another year.
Fundamental changes of the EU Budget would only be possible when the negotiations to the next multiannual financial framework start in 2014. The European Parliament was not able to assert the wish during the EU Budget 2011 negotiations to have a greater say with regard to the next financial framework. It must be feared that in the end there will be no major changes in the agricultural sector and that it will remain the largest recipient of EU funds.
Further information:
AK EUROPA position paper on the multiannual financial framework 2014+
In contrast to national budgets, the EU Budget is decided at seven-year intervals, the so-called Multiannual Financial Framework (MFF). The current framework covers the period 2007 to 2013 and sets out the expenditure for individual priorities. Economic changes have almost no impact on the EU Budget because the programmes agreed within the financial framework will be implemented, irrespective of whether the economy is up or down. In case the EU institutions agree a lower budget volume after a year, this has to be compensated in one of the following years to enable the implementation of the agreed programmes in accordance with the financial framework. Although on the one hand, the now agreed increase of the budget volume by 2.91 % helps the national finance ministers not to overstrain their Member State Budget 2011; on the other hand a greater rise of the EU Budget volume will be necessary in the following years to implement the EU programmes.
The EU Budget 2011 intends to assign € 41.7 billion to regional policy. This includes among others infrastructure projects and European Social Fund programmes. In particular the poorer EU regions have a great need to modernise their infrastructure, for example in the transport and energy sector, which can be speeded up by EU subsidies. In turn, the European Social Fund also focuses on projects to support workers and promote vocational and advanced training as well as on increasing the mobility of workers. Further € 11.6 billion will be made available for research projects, for "competitiveness" and partly also for infrastructure projects. € 8.1 billion have been allocated to the EU administration and € 7.1 billion to the new External Action Service.
However, at € 56.4 billion, the largest item of expenditure is the agricultural sector – about 44.6 % of the total budget. In particular the agricultural sector is often criticised for swallowing up a disproportionate amount of funds from the EU Budget. And indeed, the EU agricultural sector shows structural deficits, which result in the fact that large food companies receive vast amounts of agricultural subsidies whilst many of the small farmers are struggling without receiving almost any subsidies. The promotion of rural regions and people working in them is also greatly neglected.
Although the agricultural sector is the largest item of expenditure, the lower budget increase has almost only an impact on non-agricultural sectors such as regional policy or research. Because only their payments can be deferred to a subsequent year. In contrast, the agricultural sector consists mainly of subsidies or direct aid, which is paid each year and which cannot be deferred to another year.
Fundamental changes of the EU Budget would only be possible when the negotiations to the next multiannual financial framework start in 2014. The European Parliament was not able to assert the wish during the EU Budget 2011 negotiations to have a greater say with regard to the next financial framework. It must be feared that in the end there will be no major changes in the agricultural sector and that it will remain the largest recipient of EU funds.
Further information:
AK EUROPA position paper on the multiannual financial framework 2014+