Brussels, 29/06/2011 (Agence Europe) - On Wednesday evening 29 June (or at the very latest in the morning of 30 June), the European Commission is expected to adopt a raft of proposals on the next multiannual financial framework (2014-2020). Lengthy discussions have taken place between the different commissioners to reach an agreement on the figures for the different policies.
Certain sources highlighted the Commission's intention to freeze spending on the common agricultural policy (CAP) for the 2014-2020 period and to propose an EU-wide tax on financial transactions. The Commission is hoping to raise up to €50 billion a year through this tax, even though it has particularly been attacked by the United Kingdom. The Commission might also propose restricting the current volume of funding - around €370 billion for the period - for the common agricultural policy. Community funding for the CAP that is no longer index-linked or established with regard to the general trend in European funding would therefore be expected to decrease in percentage terms as a segment of the EU budget over the next few years.
The Commission is also expected to adopt a communication on “a budget for EUROPE 2020”, as well as other documents - a draft regulation from the Council sets out the multi-annual financial framework for 2014-2020; an inter-institutional draft agreement between the European Parliament, Council and the Commission on budgetary cooperation and good financial housekeeping; a draft decision from the Council on a system of European Union own resources; a draft regulation from the Council on measures for putting the system of European Union resources into place; a draft Council regulation on modalities and procedures for own resources and measures to tackle any needs identified by the Treasury ( recast).
The first major challenge involves the overall amount for the EU budget envelope. It currently stands at 1.07% of EU GDP in terms of promised payments (in terms of funds effectively paid, the volume is a little under 1%). The Commission might be tempted to propose a slight increase for 2014-2020, perhaps as a tactical manoeuvre in view of future negotiations with EU countries up until 2012, as the European Parliament, which has its say on part of the spending, has proposed a minimum 5% increase.
This rise, however, would not go down at all well in the different member states. The big countries and main contributors (United Kingdom, France and Germany) are calling for a budget freeze at the 2013 level until 2020. The Commission needs to square the circle. It is seeking to redistribute part of the current budget funds to future high potential areas such as research, new technologies and green growth. This would imply (unless a significant and improbable budget increase is obtained) two major posts being cut: the CAP accounts for 41.5% of the total annual budget of around €140 billion, together with aid to the regions and deprived areas, which account for 35% of the budget. In the first case, France is refusing any reduction in aid to farmers. In the second case, Eastern European countries, led by Poland, and mainly affected by this issue, are refusing to be sacrificed to protect the CAP or British rebate. The British rebate (a rebate on the British contribution to the EU budget was obtained by Margaret Thatcher in 1984) is again up for discussion.
On the issue of EU budget income, the Commission is advocating the creation of own resources to finance the EU budget, in exchange for a reduction in national contributions from member states. (L.C./transl.fl)