EU approves its budget

Photo: Reuters/ScanPix

Postponing decisions would have done damage to reputation of European Parliament, leaving lots of projects and people stuck in uncertainty.

Yesterday, with 537 for and 126 against, European Parliament finally approved the 2014–2020 EU budget (officially: financial framework). At that, separate polls are required with main financing programmes as CAP, cohesion, regional development and social funds, Connecting Europe Facility – including the hoped Rail Baltica support – and various others.

The seven year budget stayed at €960bn in obligations and €908bn in payments (in 2011 prices).

According to finance ministry [of Estonia – edit], there are no substantial changes for us, as compared to what was agreed in February. Estonia’s share still amounts to €5.89bn, to which – in principle – we may add the Rail Baltica construction support. 

«Support for Estonian agriculture and rural live, from EU budget, grows by 40 per cent,» said soc dems MEP Ivari Padar. «Stupid indeed would it be to say: too little, give us some more.»

At the same time, Estonian government may not top that up. Then, the local farmer may not feel the 40 per cent increase in his purse.

Old debts shaken off

The long term budget agreed by member states has, for various reasons, been sharply criticised by European Parliament. Among other things, from the beginning they did not like it being smaller that during the previous period – as, however, fiercely demanded by UK and other net contributors. Additionally, it was discussed whether the outstanding bills from the current budget should be paid so they would not fall into the next period. Result: into the 2013 budget, member states need to add €3.9bn.

The compromise achieved allows for quite flexible allocation of finds, by EU, between years and segments of expenses. Earlier, that was an impossibility – whatever was not used up, under any item, went back to member states.

«This is the result of nine months of negotiations,» said the parliament’s press secretary Jaume Duch.

«The Parliament didn’t touch the sum – we are convinced the member states have no more money to add. However, we rearranged the budget, internally.»

Meanwhile, an Estonian MEP Vilja Savisaar-Toomast (Reform Party) claimed the parliament would have liked to increase the budget by five percent – but the members states resisted.

As compared to what was agreed at the February summit, the clauses regarding macroeconomic conditionality of cohesion policy have been watered down. Meaning: should a member state fail to keep its finances tidy, it is possible to temporarily suspend its claims for structural funds; with no improvements, payments may be halted.  The requirement to meet conditions stayed in the text, but various mitigating clauses were added.

«It has been a highly emotional debate,» Said MEP Ivari Padar.

Milder punishments

At the talks last year, it was agreed that should a state violate the macroeconomic criteria, the sanctions that follow may in no case exceed 50 per cent of structural funds allotted to said state; and, should that state’s unemployment exceed EU average, the maximal sanctions are even more limited.

As part of the compromise between EU institutions and member states, a high level working group will gather, tasked with tidying up EU income system. Namely: the current EU financing model with all kinds of exceptions, sources, and dependency on member states, has become overly confusing.

According to MEP Tunne Kelam (IRL), the conservative faction was quite nervous regarding the poll, as part of the greens and liberals at the parliament had been in the habit of raising questions over the abovementioned working group.

«Delay would have been very damaging to reputation of European parliament as an institution,» noted Mr Kelam. «And, we did have the main compromise.»

Sari Essayah, a Christian Democrat MEP from Finland, said the budgets ought to no longer get entangled in technicalities. «Many people linked to EU projects were nervous already, asking what was going to happen after New Year,» said she.

In all probability, European Council (summit by heads of states) will approve final version of framework on December 2^nd.

EU financial framework 2014–2020 includes:

        2013    2014    2014–2020*

•    1A. Competitiveness, growth and jobs     15,058    15,605    125,614

    incl. Connecting Europe Facility    1,452    1,852.8    19,300

•    1B. Cohesion policy    52,392    60,283    450,763

•    2. Maintenance and management of natural recourses    59,622    56,883    373,179

•    3. Citizenship, freedom, security and justice    2,494    2,053    15,686

•    4. EU as global power    9,145    7,854    58,704

*) in 2011 prices, €m

Source: European Commission