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Monday, 11 February 2013

EU budget, development aid : falling short of Commission's proposal

After 24 hours of negotiations, EU leaders have struck on Friday 8 February a deal on the EU budget for 2014-20120, which includes among others 11% (by €3.3bn) cuts in development aid, and a decrease with 17.5% (by €58.8bn) in direct payments from the EU's agriculture spending, as compared to initial Commission proposals.
For the first time in the European Union’s the multi-annual budget  is decreasing, going to 1% from 1.12% of EU Gross national income (GNI). A €960-billion spending plan was agreed for the Union's next budget cycle - €35bn down from the current budget for 2007-2013. The biggest cuts in the new budget were made to EU's agriculture direct payments, and  regional spending (cut by €29.7bn; 8.4%).

Thus, the heading four of the multi-annual EU budget “Global Europe” suffers a cut, from the proposed €60.667 billion allocated for the period 2007-2013 to €58.767 billion for the next seven years. However, it will still amount to a 3.4% rise based on previous spending levels. European Commission president, José Manuel Barroso believes that EU did keep its commitment to support the poorest countries.
Besides this, The European Development Fund (EDF), the main instrument for providing Community development aid in the African, Caribbean and Pacific (ACP) countries and the overseas countries and territories (OCTs), has received under the new budget  € 26, 9 bn,  €3 bn less than in the initial proposal of the European Commission. In the previous period (2008-2013), the EDF had a budget of €22,7 bn. The EU's assistance to the ACP countries has traditionally been financed outside the EU budget for historical and legal reasons, but its level has been traditionally agreed as part of the overall budget negotiations.

In the same time, President of France- François Hollande- declared himself averagely satisfied with the results of the negotiations, arguing that he was successful in protecting the Common Agricultural Policy.

However, European Parliament consent on the deal  is required for it to be adopted. Given that the leaders lowered the amount of the budget which can be actual spent as payments– to €908.4bn- the deal risks not to be voted by the MEPs. They believe that this sets the Union on the edge of fiscal deficits. In response, European Council President Herman Van Rompuy said the difference between commitments and payments was in the order of 5% and the EU executive had taken measures to narrow it down, not allowing for the deficit to mushroom.


Source: European Voice, Euractiv