Brussels, 10/07/2009 (Agence Europe) - On Friday 10 July 2009, the EU Council of Ministers reached unanimous agreement in first reading on a relatively restricted draft EU budget for 2010 given the current economic climate and financial crisis. The decision whereby the Council formally draws up a draft budget for 2010 will actually be taken without debate on Monday 13 July 2009 because the meeting on Friday was not quorate (the required presence of 14 ministers was not achieved). Discussions will start between the Council and the European Parliament after the summer break on how to fund the €2.4 billion required for the European Economic Recovery Plan in 2010; the procedure for drawing up the 2010 budget (the Lisbon Treaty might come into force before the second reading of the draft budget for 2010 takes place); and the budget implications of the Lisbon Treaty coming into force.
Hans Lindblad, State Secretary at the Swedish finance ministry, who chaired the meeting, said at a press conference that against the backdrop of the economic crisis, the draft budget struck a balance between targeted cuts in appropriations in some domains and the funding of political priorities, like measures to support growth and jobs. He added that the draft budget was disciplined and financially sound, and included substantial increases in funding for R&D, education and infrastructure, with the aim of boosting innovation and competitiveness and encouraging cohesion within the EU.
The Council held a concertation meeting with a delegation of MEPs from the outgoing European Parliament, headed by the rapporteur on the 2010 Budget László Surján (EPP-ED, Hungary) and French PES MEP Catherine Guy-Quint (replacing the other rapporteur for the 2010 budget, Slovakian Vladimír Manka). The MEPs discussed the recovery programme, agreeing that the funding details that remained to be settled should not cause problems for other priorities. The EP regrets some of the cuts decided by the Council, like the cuts under Heading 1a (Competitiveness). The European Commission defended its initial draft budget which, as far at the Council delegations are concerned, is hard to justify in times of crisis (the Commission wanted a 5.3% rise in payments compared with the 2009 budget). At the Council meeting, Germany reiterated its view that the food aid programme for the EU's poor should be removed from the common agricultural policy and be covered instead by EU member states' own social policies. The Netherlands is reported to have expressed fears about the impact on the 2010 budget of the European Commission's early payment of European Social Fund monies without co-funding from the member states.
Total budget. In first reading, the Council drew up a draft budget for 2010 of €137.94 billion in commitment appropriations (€612.9 million less than in the European Commission's preliminary draft) and €120.52bn in payment appropriations (€1.8bn less). This is the equivalent of 1.02% of the EU27's gross national income (GNI) in terms of payments. Compared with the 2009 budget (amended by five Amending Budgets), the draft 2010 budget is up 1.09% for commitment appropriations and 3.74% for payment appropriations. The Council describes it as a “realistic and balanced” budget representing tight budget discipline and sound financial management.
Competitiveness for Growth and Employment (Sub-heading 1a of the Financial Framework - budget). The Council is planning total of €12.1bn in commitment appropriations (8.3% less than the 2009 budget, adjusted by the 5 Amending Budgets), and €10.5bn in payment appropriations (4.8% less than in the adjusted 2009 budget). This is a reduction of €99.8m compared with the European Commission's initial draft in terms of commitment appropriations, and a €408.3m reduction in payment appropriations. The Council suggests €7.5bn in commitment appropriations and € 6.1bn in payment appropriations for the 7th Framework R&D Programme (11% more in commitment appropriations than in 2009 but 10.7% down in payment appropriations).
Cohesion for Growth and Employment (Sub-heading 1b of the Financial Framework). The Council agrees with the European Commission's draft budget for commitment appropriations (€49.3bn) but has reduced payment appropriations by €293.1m (to €36bn in total). The Council's reductions are in the European Development Fund (-€138.43m), the European Social Fund (-€96,67m) and completion of the 2000-2006 programmes (-€58m). The margins available under Sub-heading 1b stand at €11.91m.
Conservation and Management of Natural Resources (Heading 2 of the Financial Framework). For the Heading as a whole, the Council is planning €58.6bn in commitment appropriations and €57.5bn in payment appropriations, leaving a margin of €1.472bn below the upper annual limit for spending. The 2010 budget for direct aid and market support would therefore be €43.39bn in commitment appropriations (+5.50% on the 2009 budget) and €42.271bn in payment appropriations (+5.33 %). For rural development, the Council foresees spending in 2010 of €13.975bn in commitment appropriations €13.334bn in payment appropriations, in other words a 1.94% fall and a 30.35% rise respectively on the 2009 budget.
Compared with the European Commission's initial draft budget, the Council has reduced the commitment appropriations by €363.3m (-€118.7m for intervention on farm markets, -€230m due to higher income culled from cleaning up the accounts, and -€14.60m from savings in other budget lines). The payment appropriations are €491.4m less than the payment appropriations initially requested by the Commission (-€118.7m in terms of intervention on farm markets, -€230m from cleaning up the accounts, -€98m for rural development and -€44.7m for other budget lines).
In a unilateral statement, Germany points out that the European Court of First Instance has not yet ruled on the legality of the EU programme to hand out food to the poorest people in the EU (the Commission suggests this programme be granted a budget of €500m in 2010, as in 2009). In February 2009, Germany said that it was taking the issue to the European Court of First Instance, arguing that the programme was not covered by the common agricultural policy (CAP) because the stockpiled cereals, dairy products and other food mountains have now virtually disappeared. Germany argues that each member state should take responsibility for helping the needy.
Freedom, Security and Justice (Sub-heading 3 of the Financial Framework). The Council is planning €974.2m in commitment appropriations and €692.1m in payment appropriations, in other words a rise of 12.9% and 12% respectively on the 2009 budget.
Citizenship (Sub-heading 3b of the Financial Framework). The Council foresees €634.1m in commitment appropriations and €613.5m in payment appropriations.
The EU as a Global Actor (Heading 4 of the Financial Framework). The Council foresees totals of €7.58bn in commitment appropriations (-3.3% on 2009) and €7.15bn in payment appropriations (-14%). Compared with the initial draft, commitment appropriations are €89.1m lower and payment appropriations €259.46m lower. The Council has agreed with the amounts suggested by the European Commission for the common foreign and security policy: €281.5m in commitment appropriations (+16% on 2009) and €225.6m in payment appropriations.
Administration (Heading 5 of the Financial Framework - budget). At this stage, €7.81bn in commitment appropriations and €7.82bn in payment appropriations are planned. The Council has set the EU's administrative spending at a rate close to the level of inflation and wants all vacant posts to be filled. The Council and EP have issued a statement on recruitment of officials from the new member states in 2004 to 2007. The Council will not agree to any new position being requested by the EU institutions for new activity and has not budgeted for spending on implementing the Lisbon Treaty. This approach has made it possible to free up €276.1m from Heading 5 of the EU's Financial Framework (in other words, the EU's budget).
No new posts have been agreed to for the decentralised agencies with the exception of Frontex and the new agencies planned for 2010. The Council carried out a detailed examination of the institutions' real estate policy and has adopted a statement on the matter.
2009 budget. Without debate on Friday 10 July 2009, the EU Council of Ministers endorsed the Draft Amending Budget 6/2009 as prepared by the European Commission. This draft budget still needs to be endorsed by the European Parliament. It changes forecasts for traditional “own resources” (customs duty and sugar charges), VAT and gross national income calculations, budgeting for the UK's special correction mechanism for 2005 and 2008, funding for the UK special mechanism and review of the funding of GNI reductions for the Netherlands and Sweden in 2009. These changes alter the breakdown of contributions to the EU budget by the member states under the “own resources” heading. (L.C./transl.fl)