21 February 2013

This EU budget has a sense of proportion, says German Chancellor

The willingness of all 27 Member States to compromise is the foundation on which the "unique success story" of the EU builds, she declared. The heads of government of the EU Member States agreed at the beginning of February at their second attempt on the EU’s multiannual financial framework for the period 2014-2020. Speaking in the German Parliament, Angela Merkel declared that Germany had achieved all its goals. "The now finalised financial planning gives all Member States security and allows them to plan", she stressed.

New flexibility in the budget

The agreement reached provides for a ceiling of €960 billion on the multiannual financial framework (MFF). EU Member States will in future pay in one per cent of their gross national income, meaning that for the first time ever there can be no further "growth" in spending. If all EU Member States have to save, then so must the European Union itself, explained the Chancellor.

Since the European Parliament was unwilling to approve the multiannual financial framework, the heads of state and government agreed on two offers for the European Parliament: firstly, there is to be a new flexibility allowing for reallocation of funding between spending categories and years, and secondly a review clause will make it possible to better adjust spending over the course of the seven-year period.

Growth, competitiveness and employment

The Chancellor stressed that more funds are now available for research... Funding made available under the Structural Funds too can decrease, because there are fewer regions of the EU that now need special support. This also applies to the former East Germany. A "safety net" has been put in place, however, so that there is no abrupt end to support.

To better assist the EU’s crisis-hit states, special funding will be available from the Structural Funds. Co-financing on the part of the countries affected is also to be reduced to ensure that the European Union funds can actually be used.

Angela Merkel made special mention of the new €6 billion fund to tackle youth unemployment. The money is to benefit Member States suffering youth unemployment of over 25 per cent. At the same time the Chancellor offered German assistance in training young people using dual training systems, with school- and industry-based training complementing one another.

"Better spending"

An important goal of the German government was to ensure that the EU’s funds are put to more effective use ("better spending"). This goal too has been achieved since the Structural Fund assistance will be tied to compliance with reform projects in the affected countries. Disbursement of funds can be discontinued if the Stability Pact terms are not met, explained Angela Merkel.

A fair balance among net contributors

The Brussels meeting also agreed on a fair balance among net contributors – another goal of the German government. Although Germany will remain the largest net contributor, as the Chancellor underscored, what is important at time of crisis is solidarity between the stronger and the weaker. Germany is fully aware of its responsibility as the strongest economy in the European Union.

"We could not have sold this deal, if every European nation is forced to make economies, but not the European Union itself", the Chancellor continued. It is important not only that Europe weather the crisis, but that it emerge stronger than before. The decisions taken at the European Council meeting point the way forward so that the community can enjoy a good future...

The current multiannual financial framework for the period 2007 to 2013 is worth almost €1,000 billion, of which Germany pays about 20 per cent.

Press release

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