17 November 2014

European Commission: EU budget talks to restart from a fresh Commission proposal

Despite important divergences between the Council's and the Parliament's starting positions the talks were constructive and proved to be useful for looking for a common ground. The Council made major openings towards the Parliament on some key issues such as the means to tackle the unprecedented scale of unpaid bills in 2014. In spite of the serious budget constraints that member states are currently facing on their national level the Council departed in particular from the principle that the contingency margin should not be used for financing outstanding payments.

The contingency margin is a new flexibility mechanism provided for by the regulation on the multiannual financial framework (MFF) 2014-2020 as a last resort instrument. Its effect is to increase the MFF payment ceiling of the current year which is offset by a corresponding decrease of the payment ceilings of the following years.

"We haven't won the race against the clock today. But the conciliation talks allowed us to narrow down the gap between our positions which should allow us to continue the talks on the basis of a fresh Commission proposal", said State Secretary for Economic Affairs and Finance, Enrico Zanetti.

On the 2015 EU budget the Council proposed to bring the level of appropriations in line with the budgetary constraints of the member states and to put a strong focus on measures promoting growth and jobs.

The total level of payments would amount to € 140.55 billion, which is an increase by 3.7% compared to the 2014 budget as adopted. The Parliament asked for an increase of 8.1% to € 146.42 billion. The Council proposed to increase payments for activities such as research, innovation and education by 26.6% or € 3.0 billion.

Total commitments would reach € 144.11 billion, up by 1.0% compared to 2014. The 2014 EU budget as adopted last year includes € 135.50 billion in payments and € 142.64 billion in commitments.

Full press release

European Voice: Commission to discuss national budgets

The European Commission is expected to decide at a special meeting of the college on 24 November whether to recommend sanctions for member states likely to miss eurozone budget targets in 2015 – as is the case for France and Italy. The meeting will discuss the opinions on member states’ draft 2015 budgets, as well as plans for a €300 billion investment scheme.

The opinions are the responsibility of Pierre Moscovici, the European commissioner for economic and financial affairs and a former French finance minister. Publication of the opinions, along with the annual growth survey which kicks off each European semester, is expected to offer early indications of how the Commission under Jean-Claude Juncker intends to adjudicate the heated debate on public spending within the eurozone. Eurozone budget rules empower the Commission to make policy recommendations or suggest fines for member states in breach. The Commission’s opinions are to be discussed at a special meeting of eurozone finance ministers, expected by the end of November.

François Hollande, France’s president, announced in August that France would take an extra two years to comply with the 3% limit for its deficit. Italy plans to remain within the limit, but is not planning to make the structural adjustments that are part of its targets. Both argue that the budget rules allow for such deviations under exceptional circumstances.

Both countries have been pressing the Commission over Juncker’s promised investment scheme, which they view as an essential mechanism to counterbalance budget cuts. Emmanuel Macron, the French minister for the economy, warned in the Financial Times on Tuesday (18 November) that the €300bn needs to include fresh money, not just a reallocation and leverage of money that would have been spent in any case.

Full article on European Voice (subscription required)

© European Commission