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BackThe Commission proposal on the EU budgets 2014 to 2020, which was presented this week, was to a large degree quite disappointing. For a long time, Commission President Barroso had been declaring that his top priorities were the reduction of unemployment and poverty as well as providing better education within the European Union. Now it has transpires that apart from general remarks on the Europe 2020 Strategy no new measures with regard to the EU Budget can be expected. Instead of reforming the Common Agricultural Policy, the Commission now proposes to provide the agricultural sector also with access to the EU Research Fund and the Globalisation Fund. Extra funds have also been earmarked for food safety.
According to the ideas of the European Commission, the European Social Fund should amount to about € 84 billion for a total of seven years from 2014. Inflation-adjusted, the funding remains at best the same, even though the financial framework of the EU from 2014 includes Croatia and therefore applies to 28 Member States. There is also the danger that the Council of Finance Ministers would make cuts in respect of the current financial framework as it did seven years ago. Then the Commission proposal was cut by 17 percent. Even if the € 84 billion would remain unchanged, it shows clearly that the Commission does not take the Europe 2020 Strategy seriously, at least when it comes to poverty, unemployment and education.
In its EU structural policy, the Commission emphasises that a common framework will be created for all structural funds in order to be better equipped to implement the Europe 2020 targets. An approach, which so far has to be welcomed. The funds are to be used for a limited number of priorities, i.e. in the richer regions for energy, energy efficiency, renewable energies, small and medium-sized enterprises, competitiveness and innovation. A greater selection of priorities should apply to poorer regions, such as the development of institutional capacities. In total, including the funds for the European Social Fund would amount to € 376 billion. However, in view of the priorities, listed by the Commission, one has to ask the question what exactly changes compared to the current financial framework. Any emphasis on Europe 2020 can definitely not be recognised.
The actual priority continues to be aimed at the agricultural sector: the official Commission text declares that it is the intention to pursue a greener agricultural policy. However, a 30 % tie-in of the direct aid for agricultural enterprises to environmental targets is certainly not the comprehensive agrarian reform, one might have expected. Completely new is the approach that the agricultural sector should now also have access to the Research and the European Globalisation Fund. The Fund, created to support workers, who due to globalisation have lost their job, is thereby completely alienated. The Commission intends to make up to 83 % resp. € 2.5 billion (!!) of the total of € 3 billion available, accessible to the agricultural sector. Apart from that, additional funds have been earmarked for food safety. This means that farmers have been allocated an additional amount of € 15 billion from the funds outside the agricultural sector. In total, the agricultural policy can draw on a sum of about € 387 billion for a period of seven years.
The title “Investing in “Human capital” this time is the header for the well-known EU education programmes such as Erasmus Mundus, Youth or Lifelong Learning. € 15.2 billion are to be invested in this area. The amount allocated to cultural programmes, which are also covered by this headline, is € 1.6 billion.
Concerning migration policy, the Commission sets a priority of its own. According to the Commission the reason for this is the growing concern of the population with regard to illegal migration and integration. That is why the Commission wants to set a priority to create a secure and efficient European asylum system.
Under the title “Connecting Europe”, the Commission schedules about € 40 billion for cross-border infrastructure projects for the period 2014 to 2020. This includes the Trans-European transport and energy networks and information technologies. For Austria of special interest are for example the Baltic-Adriatic Corridor (including the Koralm-tunnel) and the Helsinki-Valletta Corridor (including the Brenner-tunnel) both shall be co-financed by the European Union.
€ 70 billion are to be spent on common foreign policy. Outside the EU financial framework, additional € 30 billion have been allocated to the European Development Fund.
€ 62.6 billion have been earmarked for administrative expenditure. In this connection, the responsible Commissioner Maroš Šefčovič announced a comprehensive civil service reform, which among others intends to introduce significant cuts of allowances, an increase in weekly working hours from 37.5 to 40 and a downsizing of the apparatus of officials.
The Commission proposes to outsource some projects from the EU financial framework. These concern among others the European Globalisation Fund, the Solidarity Funds, a reserve for crises in the agricultural sector, a global climate and biodiversity fund and large-scale projects such as ITER and GMES. The expenditure outside the EU budgetary framework amounts to € 58 billion resp. 5.7 percent of the EU budget from 2014 to 2020.
Compared to the Commission proposal on the financial framework 2007 to 2013, the budget volume, presented in the new Commission proposal for the period between 2014 and 2020 has been significantly reduced. In absolute figures, both proposals remain also exactly at € 1,025 billion. However, in comparison to the Gross National Income (GNI), the EU budget is drastically shrinking from 1.26 percent to 1.05 percent. Then the EU finance ministers reduced the Commission proposal from € 862 billion resp. 1.045 percent of the GNI. Should the finance ministers have similar plans for the new financial framework, one has to expect an EU budget, which is very clearly below one percent.
The European Commission would like to launch a new system for financing the EU budget, not least to end the annual net-payers discussion. The Commission therefore proposes an own resources system, which is to be based on the Financial Transaction Tax and a new Value Added Tax system. The Commission hopes that due to the new resources the share of own resources will increase to up to 60 percent in 2020. However, the Commission did not provide any more detailed information on the structure of the Financial Transaction Tax.
Negotiations in the European Parliament and the Council
There is still hope, that within the scope of the negotiations in the Council and the European Parliament, the budget funds will be shifted towards the Europe 2020 targets. The new EU financial framework will presumably only be adopted at the end of 2012.
Hardly any emphasis is given in the structural policy to realize the Europe 2020 targets
In its EU structural policy, the Commission emphasises that a common framework will be created for all structural funds in order to be better equipped to implement the Europe 2020 targets. An approach, which so far has to be welcomed. The funds are to be used for a limited number of priorities, i.e. in the richer regions for energy, energy efficiency, renewable energies, small and medium-sized enterprises, competitiveness and innovation. A greater selection of priorities should apply to poorer regions, such as the development of institutional capacities. In total, including the funds for the European Social Fund would amount to € 376 billion. However, in view of the priorities, listed by the Commission, one has to ask the question what exactly changes compared to the current financial framework. Any emphasis on Europe 2020 can definitely not be recognised.
83 % of the Globalisation Fund appropriated to the agricultural sector
The actual priority continues to be aimed at the agricultural sector: the official Commission text declares that it is the intention to pursue a greener agricultural policy. However, a 30 % tie-in of the direct aid for agricultural enterprises to environmental targets is certainly not the comprehensive agrarian reform, one might have expected. Completely new is the approach that the agricultural sector should now also have access to the Research and the European Globalisation Fund. The Fund, created to support workers, who due to globalisation have lost their job, is thereby completely alienated. The Commission intends to make up to 83 % resp. € 2.5 billion (!!) of the total of € 3 billion available, accessible to the agricultural sector. Apart from that, additional funds have been earmarked for food safety. This means that farmers have been allocated an additional amount of € 15 billion from the funds outside the agricultural sector. In total, the agricultural policy can draw on a sum of about € 387 billion for a period of seven years.
€ 15.2 billion for education programmes such as Erasmus, Youth and Lifelong Learning
The title “Investing in “Human capital” this time is the header for the well-known EU education programmes such as Erasmus Mundus, Youth or Lifelong Learning. € 15.2 billion are to be invested in this area. The amount allocated to cultural programmes, which are also covered by this headline, is € 1.6 billion.
Concerning migration policy, the Commission sets a priority of its own. According to the Commission the reason for this is the growing concern of the population with regard to illegal migration and integration. That is why the Commission wants to set a priority to create a secure and efficient European asylum system.
Under the title “Connecting Europe”, the Commission schedules about € 40 billion for cross-border infrastructure projects for the period 2014 to 2020. This includes the Trans-European transport and energy networks and information technologies. For Austria of special interest are for example the Baltic-Adriatic Corridor (including the Koralm-tunnel) and the Helsinki-Valletta Corridor (including the Brenner-tunnel) both shall be co-financed by the European Union.
€ 70 billion are to be spent on common foreign policy. Outside the EU financial framework, additional € 30 billion have been allocated to the European Development Fund.
€ 62.6 billion have been earmarked for administrative expenditure. In this connection, the responsible Commissioner Maroš Šefčovič announced a comprehensive civil service reform, which among others intends to introduce significant cuts of allowances, an increase in weekly working hours from 37.5 to 40 and a downsizing of the apparatus of officials.
The Commission proposes to outsource some projects from the EU financial framework. These concern among others the European Globalisation Fund, the Solidarity Funds, a reserve for crises in the agricultural sector, a global climate and biodiversity fund and large-scale projects such as ITER and GMES. The expenditure outside the EU budgetary framework amounts to € 58 billion resp. 5.7 percent of the EU budget from 2014 to 2020.
EU budget shrinks significantly
Compared to the Commission proposal on the financial framework 2007 to 2013, the budget volume, presented in the new Commission proposal for the period between 2014 and 2020 has been significantly reduced. In absolute figures, both proposals remain also exactly at € 1,025 billion. However, in comparison to the Gross National Income (GNI), the EU budget is drastically shrinking from 1.26 percent to 1.05 percent. Then the EU finance ministers reduced the Commission proposal from € 862 billion resp. 1.045 percent of the GNI. Should the finance ministers have similar plans for the new financial framework, one has to expect an EU budget, which is very clearly below one percent.
New own resources
The European Commission would like to launch a new system for financing the EU budget, not least to end the annual net-payers discussion. The Commission therefore proposes an own resources system, which is to be based on the Financial Transaction Tax and a new Value Added Tax system. The Commission hopes that due to the new resources the share of own resources will increase to up to 60 percent in 2020. However, the Commission did not provide any more detailed information on the structure of the Financial Transaction Tax.
Negotiations in the European Parliament and the Council
There is still hope, that within the scope of the negotiations in the Council and the European Parliament, the budget funds will be shifted towards the Europe 2020 targets. The new EU financial framework will presumably only be adopted at the end of 2012.