Europe’s budget 2014‑2020
Germany wants EU funds to be better spent
© picture alliance / Klaus Ohlenschläger
The negotiation of the next multiannual financial framework (MFF), due to go into effect in 2014, is a key European project. The EU’s entire revenue and expenditure system will be on the table and a decision made on how some 1000 billion euros are to be raised and spent. Within the German Government, the Federal Foreign Office is lead ministry for the negotiations. Meeting in Brussels on 7/8 February 2013, the EU Heads of State and Government agreed on a draft budget up to 2020. This must now be approved by the European Parliament.
Agreement on a draft for a new MFF
The agreement reached by the EU Heads of State and Government on 8 February envisages a ceiling for spending of 960 billion euros. Germany achieved its aims: the MFF is being limited to one percent of gross national income – that was what Germany had been demanding in the run-up to the negotiations. In addition, Germany is keeping all its rebates on payments to the EU; in 2011 these amounted to 2.3 billion euros.
More money is envisaged for research and education, areas crucial for the future; spending on infrastructure and transport is being doubled; and 6 billion euros are to be made available to combat youth unemployment. Where cuts are to be made, it’s being done with moderation: regions in the new Länder which will no longer get maximum support will continue to receive 64 percent of their previous support through a combination of various measures. The money for agriculture in the EU budget will be further cut, without this meaning abrupt reductions for German farmers.
Given the difficult financial situation, the Heads of State and Government agreed to review allocations after two years (review clause).
Speaking in the German Bundestag on 21 February, Federal Chancellor Merkel said that the decisions taken would ease the way for more growth, competitiveness and employment in the EU. Germany had a special responsibility for the future of Europe, she said. Germany’s key aims had been achieved with the agreement reached at the beginning of February, she went on.
The EU’s multiannual financial framework (MFF, previously known as the financial perspective) is the central planning instrument for the use of European Union funds. It is intended to ensure that the EU manages its spending in an orderly manner and within the limits of its budget. Funds are allocated with a view to advancing the EU’s political goals, thereby ensuring its future viability. With regard to budget funding, the prime concern is to ensure fair burden-sharing.
Germany wants to see “better spending”
The EU’s current financial framework for 2007 2013 encompasses nearly 1000 billion euros, of which Germany contributes around 20 percent. Negotiations on the multiannual financial framework for the period beginning in 2014 started in autumn 2011. At a time of tight budgets in nearly all EU member states, the principle of strict budgetary discipline must be reflected also in the negotiations. Given its own consolidation efforts and the burden it continues to bear as the EU’s largest net contributor, Germany is particularly keen to see limits on expenditure.
On 6 February Foreign Minister Westerwelle summed up Germany’s position: “What is needed,” he explained, “is not more spending but better spending aimed at boosting competitiveness and growth.” Speaking in the run-up to the European Council in Brussels on 7 February, Michael Georg Link, Minister of State at the Federal Foreign Office, likewise called for “a modern EU budget”. The “scattershot approach” to distributing funds was outdated, he said.
In June 2011 the Commission presented its proposal for the next multiannual financial framework for the years 2014 to 2020. In addition to the Commission proposal, by the end of 2011 work had been completed on drafting some 70 regulations dealing with specific policy fields. In the first half of 2012, the Danish EU Council Presidency created a document known as the “negotiating box” to keep track of how the negotiations were proceeding. The work was taken forward on this basis by the Cypriot EU Council Presidency, which in late October presented the first proposals for the allocation of funds under the various expenditure headings. So the negotiations entered the end-spurt. At the Extraordinary European Council held on 22/23 November 2012, EU Heads of State and Government were unable to finalize an agreement. On 7/8 February 2013 they then agreed on a draft MFF.
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Last updated 21.02.2013