Sunrise or sunset on the 2014 budget?
In the final days of the Irish Presidency of the Council of the European Union, an agreement on the EU’s 2014-2020 Multiannual Financial Framework (MFF) was eventually negotiated in June 2013. After many months of talks, it was hoped this particularly difficult chapter of EU financial matters had passed. The next MFF is also unique as it sees for the first time a real terms cut in the EU’s expenditure – a decrease of 3.5% according to the Council.
Although this deal on the MFF still stands, with EU expenditure set at €959.99bn for 2014-2020, there are now new concerns on the annual 2014 EU budget. The MMF provides the maximum annual amounts that the EU may spend in different political fields and is a structure for multiannual financial planning. An annual EU budget is then subsequently adopted within this remit and the ceiling of the MFF for yearly spending.
Change in the air?
The Council of the European Union has recently adopted a position on the 2014 annual budget, a move described as “puzzling” by the European Commissioner for Financial Programming and Budget, Janusz Lewandowski. The Council’s position paper calls for a reduction by €240.68m in commitments and €1.06bn in payments compared to the Commission’s annual budget proposal. According to the European Commission, this reduction could have a negative impact on Horizon 2020 and the Programme for the Competitiveness of Enterprises and SMEs (COSME), key priorities, Lewandowski says, for the European Council’s focus for investment in growth and jobs.
According to the paper, ‘The Council’s position thoroughly respects the expenditure ceilings of the new MFF while keeping appropriate margins in order to meet possible unforeseen expenditure needs.’
The Council proposes €142bn in commitments and €135bn in payments, a 6.15% decrease and 1.35% increase respectively compared to the current 2013 EU budget. Although the Council has made no changes to the budget of Horizon 2020 in 2014, the EU institution does propose a €14.5m reduction in admin expenditure to the EU’s overall research and innovation policy area, particularly hitting Horizon 2020 administrative support. Affected areas would include temporary staff, management and external personnel working on the next framework programme. The Council also proposes a €7m reduction in the budget to help complete activities relating to FP7.
“Worrying”
The Commission first presented a draft 2014 EU budget in June. In a statement responding to the negotiations between ministers in Lithuania, Lewandowski said “common sense had not prevailed in the Council” and that this was to be seen as a “worrying” development.
He continued: “I am puzzled. Our proposal for Europe’s 2014 budget constituted a sharp cut on 2013, about 6% for both commitments and payments, yet the Council now calls for even further cuts such as a reduction of €1bn for payments. Even worse, the Council recommends cutting in the very areas that heads of states and governments, in the conclusions of the June European Council on growth and jobs, recommended we invested in programmes aiming to boost Europe’s businesses competitiveness (COSME) or research and innovation (Horizon 2020). Furthermore, the Council’s position completely ignores Europe’s heads of states’ and governments’ recommendation to frontload key programmes such as Erasmus for all and the Youth Employment Initiative.
“You cannot one day agree to concentrate funding of programmes in 2014 and 2015 rather than evenly spread them over the seven years of the financial period and then conveniently ignore that agreement when discussing the 2014 EU budget.”
The Commissioner says that the Council’s position could have further detrimental effects on Horizon 2020 with a reduction in the staff budget. Lewandowski added though he hoped agreement could be found between the trialogue of EU institutions.
“Once again, we witness a situation in which heads of states and governments outline what Europe’s spending priorities should be, only for their own national services to ignore them. The cuts to administrative support expenditure put at risk the launch of those same programmes and initiatives; this is particularly worrying for research and innovation where the Council recommends a 7% reduction in the budgetary lines paying staff.”
Parliamentary focus
The European Parliament will now have its opportunity to have its say on the annual budget – either approving the Council’s position or adopting fresh amendments. If the Parliament introduces amendments, a three week conciliation period will be instigated between the Council and the Parliament.
“I can only hope that the conciliation procedure that will follow the Parliament’s position on the 2014 budget will enable us to reach an agreement that is sensible, that does not go against the wishes of Europe’s national leaders and that will give Europe’s economy and confidence a badly needed boost”.
Horizon 2020 will still begin on 1 January 2014 and will still have a budget of €70.2bn. Yet fresh delays and concerns over the EU’s annual budget will only lead to uncertainty on the level of funding researchers will be able to receive in the world’s largest RDI investment scheme in the first year of the next research and innovation framework programme.
You can read the Council’s statement in full here.
Janusz Lewandowski
