Brussels, 21/09/2006 (Agence Europe) - On 21 September, the European Commission adopted its report on EU expenditure for 2005, which exposed the problems the ten new Member States had in spending Community funding for structural actions (structural and cohesion funds). The Commission also drew positive lessons from the information: budget execution was the best since the start of the current financial perspective (2000-2006) and the Member States which benefit most from Community policies remain the ones which are the most prosperous in the EU, at least in absolute terms.
At a press conference, Budget Commission Dalia Grybauskaite said that the new Member States received 9.5% of the budget in 2005, some €9.5 billion, slightly more than in 2004 (6.6%, €6.1 billion). The Commission points out that the ten new Member States were being progressively integrated into all of the EU policies, particularly for agricultural and cohesion spending. Ms Grybauskaite highlighted “serious problems” in these countries in absorbing cohesion policy funding. The amount in terms of commitment appropriations for these ten countries in the area of structural actions (structural and cohesion funding) was €21.45 billion from May 2004 to September 2006. Effectively €5.6 billion was paid to them ((payment appropriations), which represents an absorption capacity of only 26.2% on average, while, according to Ms Grybauskaite, this percentage should be somewhere in the region of 40%. “It is not disastrous, but it's a warning,” she said, stressing particularly the poor performances of Poland (€2.7 billion paid out of €11 billion earmarked, execution level of 24.5%) and the Czech Republic (€521.9 million out of €2.2 billion committed, 23.5%). These countries managed to receive less in structural aid in 2005 than in 2004, the Commissioner pointed out. She did not expect improvements in 2006 and called on these countries to simplify and improve their administrative procedures. The Commission pointed out that in 2007 funding which is not spent by the new Member States will automatically be cancelled.
Record budgetary execution: the report shows that total EU spending was €104,835.2 billion (up 4.7% on 2004), with a “historic” level of budgetary execution of 99.21% (98.4% in 2004, 96.6% in 2003, 87% in 2002 and 85.9% in 2001). The Commissioner noted with satisfaction an 8% increase on 2004 in Community funding for economic growth and employment (€8 billion for internal policies, of which 6% more for research and 26% more for trans-European networks) and recalled improvements to be expected in this area with the 2007-2013 financial framework. But she felt it was “essential” to reform the budget before 2008/2009.
Beneficiaries from EU budget: as in 2003 and 2004, in 2005 Spain was the main beneficiary, in absolute terms, with €14.8 billion, ahead of France (€13.6 billion), Germany (€12.3 billion), Italy (10.7 billion), the United Kingdom and Greece. Poland is in eighth place (tenth in 2004). In 2005, France continued to take the lion's share of agricultural spending, with €10.01 billion (20.7% of EU agricultural spending), ahead of Germany, Spain and Italy. Spain remained by far the main beneficiary in terms of structural actions, with almost €8 billion (24.4% of the total), ahead of Germany, Italy and the United Kingdom (which was in seventh position in 2004). In relative terms, Luxemburg remained at the head of the table, with total spending representing 4.5% of its gross national product (4% of which for administrative funding for Community institutions on its soil). With 3.29%, Lithuania was in second place (first if Luxemburg's administrative spending is not included), ahead of Greece (3.15%), Malta (3.10%), Latvia (3.05%), Portugal (2.68%) and Estonia (2.49%).
Contributions to the budget: as in 2004, the richest Member States contributed most, in absolute terms, to the budget. Germany (€17.4 billion), France (€15.5 billion), Italy (€12.2 billion) and the United Kingdom (€9.6 billion) together financed practically two thirds of the EU budget. National VAT and GNI-based contributions were €86.75 billion in 2005, compared with only €14 billion from traditional own resource (customs duties, agricultural and sugar levies, €3 billion other revenues and €2.7 billion surplus from 2004).
Budgetary balances: the Netherlands showed the least favourable budgetary balance (-0.52% of GNI), followed by Luxemburg (-0.36%, because administrative spending is excluded), Sweden (-0.30%) and Germany (-0.27%) the other winners were Greece (+2.19%) and Portugal (+1.64%) among the old 15 Member States, and the Baltic countries and Malta among the new Member States.