19 November 2013

ECOFIN Council/BUDG Committee approve agreement on 2014 EU budget

The Council formally approved the agreement with the EP on the 2014 EU budget. The 2014 EU budget puts strong emphasis on priority areas such as growth, jobs and innovation, while reflecting Member States' consolidation efforts at national level.

Next year's budget includes €6.3 billion in payments and €9.3 billion in commitments for the research framework programme Horizon 2020, and €900 million in payments and €3.6 billion in commitments to kick-start the Youth Employment Initiative.

Overall payments amount to €135.50 billion, which is €8.9 billion or 6.2 per cent below the 2013 EU budget (including all additional funds agreed by the Council and the European Parliament in the course of this year). Overall commitments have been set at €142.64 billion, which is a decrease of €9.5 billion or 6.2 per cent compared to the 2013 EU budget. This leaves a margin of €711.39 billion in payments (if the funds for the special instruments are not taken into account), allowing the EU to cope with unforeseen events. The European Parliament is expected to approve next year's EU budget tomorrow, which is then considered to be adopted.

The 2014 EU budget is in line with the multiannual financial framework (MFF) for 2014-2020 which is expected to be approved by the European Parliament today and formally adopted by the Council on 2 December. The next MFF provides for a reduction of the expenditure ceiling by 3.7 per cent in payments and by 3.5 per cent in commitments compared to the current MFF (2007-2013).

Full Council press release

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The EP's budget committee approved deals struck with Member States on the EU budget for next year and the coming seven years, also known as the multiannual financial framework. The Parliament succeeded in its push to ensure more flexibility in funding EU programmes for the next seven years and successfully resisted calls for spending cuts in employment, research and innovation in the 2014 budget.

“Parliament has taken its responsibility by accepting a lower budget", said Alain Lamassoure, chairman of the budget committee. "But we managed to get the priorities right and prevent the EU from starting 2014 - the first year under the new multi-annual financial framework - in the red.”

Next year's budget

The Council agreed to the Parliament’s demands for more money to help tackle rising youth unemployment across the EU. For next year's budget the Parliament also secured more funds for humanitarian aid, refugees, asylum policy and Frontex, the EU’s external borders agency. Another €500 million was added to the EU's 2014 budget, bringing the total to €135.5 billion.

Long-term budget for 2014-2020

Although the political deal on the MFF 2014-2020 was reached already in June, the Parliament postponed the vote until its conditions were met. These included greater flexibility, allowing money to be more easily shifted between budget lines; covering payment shortfalls for this year's budget and setting up a high-level working group on ways to update how the EU collects its own income.

The EU's budget for the next seven years is €960 billion. All annual budgets in this period will have to be in line with the spending limits set in the long-term budget.

Mr Lammasoure, a French member of the EPP group, explained: “The European Parliament chose not to put into question the levels of annual maximal spending agreed by the Member States at a time where money is scarce in national treasuries. In exchange, it obtained a review clause in 2016 which will enable to take into account the new economic situation and to review the expenditure as well as the revenue side of the European budget, so as to maximise its leverage effect to boost growth and jobs.”

Next steps

MEPs will vote on the proposal for the EU's long-term budget on 19 November. The day after that they will vote on the EU's budget for next year.

BUDG-committee press release

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