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2014-2020 budget freeze not possible unless agreed policies are slashed

Plenary Session Press release - Budget08-06-2011 - 13:30

The European Parliament has issued a challenge to the Member States who want to freeze the EU's next long-term budget covering the period 2014-2020. These countries should spell out which priorities they would drop as a consequence of the freeze, say MEPs. If all the objectives and policies agreed for the EU are to be completed, a minimum increase of 5% is needed compared to the 2013 budget, says Parliament.

"We have to put an end to this bad habit of entering into a political commitment without having enough funding to back this... Reducing the EU budget is not a viable option for those of us who believe in a competitive Europe" said Salvador Garriga Polledo (EPP, ES), the MEP responsible for the report on the seven-year budget, known as the multiannual financial framework (MFF) or financial perspective. 

"The MFF needs to reflect the EU 2020 strategy and other agreed policies. When we are asking for increases, it is not because we are inventing things. We just want a realistic and implementable budget", added Jutta Haug (S&D, DE), chair of Parliament's Special Committee on Policy Challenges, which had worked for a year to produce the report. The resolution embodying the committee's conclusions was adopted on Wednesday by 468 votes to 134, with 54 abstentions.

Fears for research, infrastructure and other policies

MEPs feel that freezing future budgets at the 2013 level "is not a viable option". An increase of at least 5% over the 2013 level - as they propose - would mean that the EU budget would be roughly 1.11% of the EU's total GNI, compared to the 1.06% expected for 2013.

MEPs urge the Member States who advocate a frozen or reduced long-term budget to state exactly which policy priorities they want to drop in order to make room for a budget cut. Parliament fears that budget restrictions could jeopardise the already agreed boost for research and innovation (from today's 1.9% of GDP to 3%) as well as investment in infrastructure, foreign policy and enlargement.

Regional policy (cohesion and structural funds) and farm spending should remain at current levels, says the resolution. Regarding regions whose GDP per capita stands at between 75% and 90% of EU GDP, MEPs urge the Commission to establish an intermediary category for the next budget period to give these regions a clearer status and more security in their development. Furthermore, investment in energy infrastructure should go up. Savings could possibly be made on EU administration, for instance, if the European Parliament were to have a single seat.

New resources, no more rebates

MEPs criticise the current funding system, which relies almost entirely on national contributions and has become extremely complex. The EU Treaty says that the EU-budget "shall be financed wholly from own resources". The current funding method places disproportionate emphasis on net balances between Member States, contradicts the principle of EU solidarity, dilutes the European common interest and largely ignores the advantages of financing policies at EU level, they argue.

A system of real own resources would be "fairer, more transparent, simpler and equitable", say MEPs, whilst at the same time stressing that budget reform need not affect the size of the budget and would not increase the overall tax burden on citizens. They also call for an end to the "rebates, exceptions and correction mechanisms" that have accumulated within the current system.


One problem with the current MFF is the lack of flexibility it allows within annual budgets. If something new or unexpected comes up, it is hard to adapt the budget to accommodate it. MEPs would therefore like to see a "global MFF margin" to be created, consisting of unused margins, de-committed and unused appropriations from the previous year.

Next steps

Parliament is the first EU institution to set out its position on the next long-term budget. On 29 June, the Commission is to table two proposals, one on the next MFF and the other on own resources. Negotiations will then begin. The current multi-annual financial framework ends in 2013.

Procedure:  Own-initiative

REF. : 20110608IPR20927