Tuesday, 27 May 2008

Commission presents 2009 Budget

On 6 May, Dalia Grybauskaité, European Commissioner for Financial Programming and the Budget, presented the preliminary draft of the 2009 budget, launching the negotiations on the annual budget procedure between the Parliament and the Council. 2009 will be no exception to the predictable rule of thumb: that the EU budget wastes millions of euros and pounds of taxpayer’s money. The Commission has proposed €134.4 billion in commitment appropriations, which represents 1.04 per cent of the Union’s GNI and an increase of 3.1 per cent compared to 2008. The payment appropriations are €116.7 billion, representing 0.9 per cent of the EU’s GNI and a fall of 3.3 per cent compared to the 2008 budget. Grybauskaité has explained that this decrease was due to certain payment appropriations, mainly those funding structural actions, were finalised and paid in advance in 2008 and consequently will not be paid in 2009.

Last year, the European Commission proposed that economic growth and employment would be the largest part of the Union’s 2009 budget, representing 45 per cent of the budget. Although agricultural expenditure is not the main spending it still represents almost 43 per cent of the budget. Hence, €60 billion will be allocated for growth and employment. A total €11.7 billion will be channelled into areas such as research, innovation and lifelong learning which represents a 5.5 per cent rise from 2008. For the ‘Lifelong learning programmes’ a total appropriation of EUR 935,4 million was proposed by the Commission for operational expenditure for 2009. The organisations which receive funding are the ones which promote EU integration. As Chris Heaton-Harris MEP has said “… most ‘educational’ material emanating from the EU is more like pro-integration propaganda.” The Lifelong learning programmes are a significant waste of UK taxpayers’ money. Around €57 billion will be allocated to ‘Agricultural and Rural Development. With an increase of 2.5 per cent compared to last year, €48.4 billion will be allocated to programmes to support cohesion across Europe. In 2009, around €40 billion will be allocated to the structural funds and over €9 billion for the Cohesion Fund.

The 2009 budget has been called the “green budget” as around €17 billion will be allocated to energy and climate change packages. A massive €14 billion of funds will go toward environmental targets and funding for energy objectives such as the development of sustainable energy, which demands around €2.3 billion. The spending on ‘EU as a global partner’ will be allocated €7.4 billion which represents an increase of 1.8 per cent compared to 2008. There is an increase of 1.1 per cent in the freedom, security, justice and citizenship heading budget which amounts to 1.5 billion in commitment appropriations, an 8.6 per cent rise over 2008. €839 million will be allocated to fight crime, terrorism and manage migration flows. There is a significant increase concerning security and safeguarding liberties which will rise by 32 per cent, with €90 million being spent on combating crime. €52 million will go on citizens’ programmes focusing on European culture. The Commission also wishes to see an increase of 5 per cent in the budget for administrative expenditure across all EU institutions. The Commission has therefore proposed €7.6 billion for administration. It wants to create around 250 new posts taking into account the enlargement to Bulgaria and Romania.

There is no clear added value in spending such amounts at the EU level. The EU has been spending UK taxpayer’s money on policies that clearly do not benefit them. Taxpayers are forced to spend millions of pounds on the Commission’s projects such as Galileo and the European Institute of Technology which they do not want. The UK is contributing to EU programmes that are of no benefit to British people. The UK net contributions have been increasing. Under the financial perspectives agreement reached in December 2005, Tony Blair agreed to increase the UK contribution to the EU budget for 2007-13. The UK’s 2005 net contribution was £3.6 billion, £3.9 in 2006 and according to HM Treasury European Community Finances Statement on the 2007 EC Budget the UK’s 2007 net contribution is estimated to be £4.7 billion. According to several researches in this area, the UK’s 2008/09 net contribution is estimated to be around £6.1 billion and in 2009/10 around £6.4 billion.

The Commission has not taken into account expenditure related to the Lisbon Treaty, such as new provisions for the European external action service, because the Treaty has not been ratified yet. According to the Commission, that spending will not be significant as it will mainly be covered by national governments. Instead, there will be a budget correction in due time. The Commission does not want to touch these delicate issues in order not to upset the Lisbon Treaty’s ratification. Nevertheless, the EU Member States have already started discussions on the proposed new President of the EU such as possible salary and staff. Nobody knows yet precisely what will be the job of the EU President however according to the EUobserver, the EU Member States are already talking of providing the President with “a salary of around €270,000, a chauffeured car, a housing allowance and a personal staff of around 20” which will be almost equivalent to what the President of the European Commission is getting. Another innovation of the Lisbon Treaty which will have repercussions on the budget is the change to the European Council, which will become an EU institution and therefore it will have its own budget. There is also the expenditure for the post of the EU High Representative for Foreign and Security Policy which also needs to be covered by the budget.

The European Commission presented the preliminary draft budget for 2009 to the Ecofin Council on 14 May. The Council is planning to present a draft budget at first reading on 17 July. The EU Member States will now analyze the draft budget and they will in all likelihood, attempt to cut spending in areas where the European Parliament would like to increase it. Several MEPs are not pleased with the tight margins of the draft budget in several areas, particularly that dedicated to the Union’s external actions. According to Europolitics, Jutta Haug said that the budget for “the EU as a global partner” does not take into account everything that needs to be funded. Nevertheless, several MEPs have already shown their satisfaction with the increase in funds for the Seventh Framework Programme for Research, the Trans-European Networks and Galileo. It should be mentioned that the Lisbon Treaty amends the budget procedure conferring further powers on the European Parliament. The Lisbon Treaty abolishes the distinction between compulsory and non-compulsory expenditure, hence the European Parliament will be on equal footing with the Council. The European Parliament will be able to influence the entire budget.

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