The Council and the European Parliament approved, last November, the 2014 EU’s budget, which amounts to €142.6 billion in commitments, representing a decrease of 6.2% compared to the 2013 EU budget and €135.5 billion in payments, which is 6.2% below the 2013 EU budget. The Government has called for further reductions, particularly, on Heading 5 (Administration) but due to QMV, it was unable to get a better deal. Nonetheless, the European Commission has already said that this year’s budget is not enough to pay EU bills and it is demanding more money from the member states. Brussels is stretching the patience of the British taxpayer and this cannot go on. The time has come to say No and stop paying this vast amount of money for running the EU, which is a failing project.
It is important to recall that last year the European Parliament and the Council adopted nine amending budgets put forward by the European Commission asking further contributions from member states amounting around €15 billion. This has cost UK’s taxpayers an additional €1.9bn. These series of unacceptable demands for further contributions to the EU budget are likely to happen this here again. In fact, the European Commission has recently proposed a draft-amending budget No 3 for the year 2014. This is just the first of several Draft Amending Budgets asking for further contribution from the member states that are likely to happen during this year. At a time when most Member States are still struggling to reduce public spending and implementing austerity measures the Commission has the cheekiness to request further contributions to the EU budget. In fact, as an EU diplomat said, according to the Euobserver, “Given what we’ve seen in the European Parliament elections, you can’t imagine that EU citizens will want to contribute yet more money to Brussels. There’s a strong message from many countries that the Commission needs to think again before using the contingency margin in this way”.
The European Commission pointed out that “The ceiling for payment appropriations in 2014 is set in the 2014-2020 MFF at EUR 135 866 million (in current prices)” and stressed that “This is EUR 8,4 billion lower than the final budget 2013, whereas the payment needs for the year 2014 would have required a payment ceiling that is more in continuity with the 2013 ceiling”. Consequently, according to the European Commission “…already at this stage of the year, shortages of payment appropriations are visible across all headings”. The Commission wants therefore to increase the 2014 level of payment appropriations by EUR 4.738 billion to cover additional payments for EU programmes in research and innovation, education and support for small and medium-sized enterprises, such as Horizon 2020, the Youth Employment Initiative, Erasmus+ and COSME, as well as other EU programmes that require more money to cover the requirements of 2013. A substantial part of the required extra money, around €3.4bn, would be used to reimburse claims from Member States, mainly from Eastern Europe, for cohesion policy projects and to cover €250 million of the support package to Ukraine to be paid in June.
The European Commission is demanding further EUR 2.16 billion in member states’ contributions to the EU’s present budget. It said that EUR 1.5 billion would come from competition fines and redeployment of budget lines. However, as it has been pointed out, if the budget was not increased such money could be used to reduce member states’ contributions.
The Commission has proposed to fully use the unallocated margin under the 2014 payment ceiling (EUR 711 million) and mobilise a new mechanism agreed for the 2014-2020 period, the contingency margin. The Council Regulation laying down the multiannual financial framework for the years 2014-2020 provides “A Contingency Margin of up to 0,03 % of the Gross National Income of the Union shall be constituted outside the ceilings of the MFF, as a last-resort instrument to react to unforeseen circumstances.” This clause allows 0.03 % of the EU GNI to be added to an annual budget in case of unforeseen circumstances. The Commission wants to fully mobilize this mechanism, whose absolute amount for 2014 is EUR 4 026,7 million, “to cover all the budgetary consequences of those events that have arisen after the agreement on the 2014-2020 MFF payment ceiling in February 2013.” According to the European Commission “the needs could not have been foreseen when the payment ceilings were established in February 2013 and that there is no other option than the mobilisation of the Contingency Margin.” However, according to the Euobserver, eight member states, including the UK, France, Germany, the Netherlands, Sweden, Austria, Denmark and Finland, have already shown their opposition to the European Commission’s proposal to increase this year budget, and particularly to activate the contingency margin. They stated, “A proposal for the mobilization of the contingency margin in 2014 would not only be legally questionable but also unnecessary, premature and not a ‘last resort’ option.” Then, they stressed, “The Commission should consider alternative options to manage any 2014 payment pressures, including re-prioritisation and the reimbursement of end-2014 claims in early 2015,”.
The Government has already rejected the European Commission’s request for additional payments for the EU Budget. This would cost UK’s taxpayers an additional £500m in 2014. The Government is unable to veto it, as the request for extra funds can be approved if a qualified majority of member states supports it. The Treasury said in a statement, “We will work with other governments to achieve a budget for this year which ensures budget discipline and reflects the economic reality in Europe, as well as the tough but fair deal done by the prime minister last year.” Presently, 8 Member States have already shown their opposition to the Commission’s proposal, consequently, there is no qualified majority support. However, it is important to recall that last year the UK was able to form a blocking minority which was then lost, as only the UK and Holland stuck to their guns and voted against the several draft amending budgets for 2013. It remains to be seen whether the Government will be able to block the approval of additional contributions to the EU’s 2014 budget. The Council is most likely to agreed to provide further EUR 4.738 billion to this year budget. Due to QMV the government is likely to be outvoted, as it was last year when the Council approved several draft amending budgets for 2013.