Brussels, 14/11/2012 (Agence Europe) - On Wednesday 14 November, the president of the European Council, Herman van Rompuy, proposed reducing the European Commission's initial proposal (€1,033 billion) on the next EU Multiannual Financial Framework (2014-2020) by €74.5 billion. A total reduction in direct agricultural aid is planned of €16 billion, 5.92%, according to sources close to the European Commissioner for agriculture, Dacian Ciolos. There will be a €29.5 billion cut in cohesion policy to €309.5 billion instead of the Commission's initial proposal of €338.9 billion.
The draft conclusions on the 2014-2020 financial framework released by Van Rompuy for the special summit on 22-23 November is harsher on agriculture and cohesion spending than that proposed in the Cypriot presidency's negotiation box on 29 October. The version put forward by Van Rompuy is not as hard when it comes to Heading 1a competitiveness (research, enterprise, education, social agenda etc) and the Connecting Europe Facility (CEF).
An initial debate on the compromise proposed by the president of the European Council will take place on Thursday 15 November at a committee of permanent representatives of member states to the EU (Coreper). It will be examined by the General Affairs Council on Tuesday 20 November and then a final version is expected to be made available for the special summit on 22 and 23 November.
Heading 1a competitiveness. Van Rompuy's text proposes a maximum figure of €152.3 billion (maximum of €146.31 7 billion in the Cypriot compromise) for the whole period, which is €7 billion less than in the Commission's initial proposal.
The envelope for the Connecting Europe Facility (CEF) will receive a total of €46.2 billion, including €10 billion from Cohesion Funds. This is a €4 billion cut with regard to the initial proposal and subsequently involves a degree of damage limitation. Transport infrastructure will benefit from €29.6 billion (€31.7 billion initially planned) and the CEF includes €8.2 billion for energy (€9.1 billion sought by the Commission) and €7 billion for telecommunications (€9.02 billion initially). It should be noted that for the first time, the Commission's proposal (€500 million) for decommissioning nuclear plants in Lithuania (€210 million), Slovakia (€105) and Bulgaria (€185) was taken up again.
Heading 1b cohesion. Van Rompuy is hitting the Cohesion Policy hard. The total envelope planned is €309.5 billion for 2014-2020, as opposed at €338.9 billion proposed last July by the Commission. This effectively means a cut of €29.5 billion and risks provoking the anger of around 15 EU countries that wanted to maintain a more ambitious budget. €299.6 billion is planned for growth and jobs in less developed regions (€156.1 billion), those in transition (€29.1 billion) and more developed regions (€47.5 billion), Cohesion Fund supported countries (€65.9 billion) and outermost regions (€925 million). €9.814 billion is planned for territorial co-operation in Europe. The text reduces the amount of Cohesion Funds to €45 per person, as opposed to €48 in the Cypriot compromise and €50 in the initial proposal. Provisions are also planned for countries that have benefited from Cohesion Funds up until 2013 and where per capita GDP is above the 90% threshold for the EU average, with €45 in per capita aid in 2014 but which will gradually be scrapped by 2020.
The cap on Cohesion Funds was 2.5% in the Commission proposal. It has been reduced to 2.4% in this text (2.36% in the Cypriot compromise). Co-funding rates through the EU budget have been revised downwards (75% in the majority of cases).
Aid to the poor. €2.1 billion for 2014-2020 is planned to fund the assistance programme for the poorest sections of the EU community. This programme will no longer be funded by the budget for the CAP but through the European Social Fund.
Heading 2 natural resources. Van Rompuy is counting on a maximum amount in this heading (agriculture, rural development, fisheries, financial instruments of the environment and climate action) of €364.4 billion, €25.5 billion less than in the Commission's initial proposal. €269.8 billion is planned for direct aid and agricultural market measures, €13.2 billion less than that proposed by the Commission. The envelope for rural development has been reduced by €8.3 billion to €83.6 billion. The cut in agricultural aid for redistribution requirements of amounts between countries has been increasingly staggered over time than in the separate compromise and the cap on bonuses to major farming concerns have become optional.
Income. Van Rompuy is advocating the maintaining of the existing rebate granted to the United Kingdom every year. In 2011, the amount for this rebate stood at €3.6 billion. It is funded by all its partners but the biggest contributors are France and Italy. The draft document explains that all rebates will have to be fully funded by member states on the basis of their contribution. The proposal recommends a new resource based on VAT and the contribution from the tax on financial transactions, which is expected to be implemented by at least 11 of the 27 EU member states. It also advocates that two-thirds of revenue generated by this tax for the European budget be used to reduce national contributions. (LC/trans/fl)