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'Restricted' 2016 EU Budget focuses on jobs, growth, migration and global action

Posted by Nick Prag at 28 May 2015, 16:55 CET |
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The European Commission on Wednesday proposed a 2016 EU budget of EUR 143.5 billion in payment credits to support the recovery of the European economy and help improve lives in Europe and beyond.

'Restricted' 2016 EU Budget focuses on jobs, growth, migration and global action

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The main figures for the Budget are commitments of EUR 153.5 billion (1.04% of EU GNI, +2.4% without reprogramming of EUR21 billion from 2014), with a margin of EUR 2.2 billion; and payments of EUR 143.5 billion (0.98% of EU GNI, +1.6%), with a margin of EUR 1.6 billion.

Commitments represent the combined value of contracts that the EU is allowed to sign in any given year. Commitments are honoured with payments, either in the same year or (in the case of multi-year projects) in subsequent years.

Payments are actual money paid in a given year from the EU budget, which can cover commitments made that year or in previous years.

For instance, when the EU agrees to co-fund the building of a bridge, the total amount which the EU agrees to cover is a commitment. The bills for the work done are the payments. The EU has to use the money at its disposal to make the payments and cover its original commitments.

In general, payments in the new draft Budget are remaining roughly constant. The EU budget accounts for around 1% of the EU's combined Gross Domestic Product (GDP) or approximately 2% of the public spending of the 28 EU Member States.

The main features of the budget include:

  • Nearly half of spending (EUR 66.58 billion) to be used to stimulate growth, employment and competitiveness.
  • The Budget reflects the political priorities of the Commission - for example the Energy Union and the Digital Single Market, via programmes like the Connecting Europe Facility (EUR 1.67 billion in 2016).
  • EUR 1.8 billion (30% more than 2015) to go to Erasmus+, the European programme for education, training, youth and sport, which the Commission says will help over 4 million people to work and study across the EU in 2014-2020.
  • Increasing competitiveness through research and innovation with programmes like Horizon 2020 (EUR 10 billion in 2016, up 11.6% from 2015).

EUR 2 billion in commitments and €500 million in payments for the guarantee fund of the EFSI, to unlock EUR 315 billion in investment for Europe. The EFSI-Regulation, including the budgetary aspects of the new investment structure, is subject to ongoing negotiations between the European Parliament and the Member States.

A total of EUR 42.86 billion for farmers.

More money will also be available to tackle Europe's migration challenges. The budget supports the European Agenda for Migration presented earlier this month and strengthened emergency assistance to front-line Member States and funding for an EU-wide resettlement scheme.

The EU budget responds to developments in Europe's neighbourhood and beyond, with money to support the EU's capacity to respond to external crises, such as those in Ukraine and Syria, and to provide humanitarian help to those in need.

The Commission says it has responded to the need to use taxpayers' money wisely. It believes the Budget will support the economic recovery through investment for growth and jobs, and help manage external challenges such as migration.

At the European Parliament, MEPs in the Budgets committee were quick to welcome what was seen as a "restricted" but well focused draft budget for next year, presented to them by Commission Vice-President Kristalina Georgieva them immediately after the Commission had approved it.

Several MEPs welcomed the comfortable margins - the gap between program allocations and the ceiling set by the multi-annual financial framework (MFF) - as a possible solution in ongoing negotiations between Parliament and Council on the financing of the Juncker investment Plan.

While the budget is not enormous, , so long as the budgetary flexibility it provides is "utilised to the full".

The Commission now submits the draft budget to the European Parliament and the Council, the two arms of the "budgetary authority", for a decision.

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Nick Prag

Nick Prag

Nick Prag is founder and managing editor of Prior to EUbusiness, he was senior editor at Europe Online SA in Luxembourg, where he played a major part in the launch of Europe Online International.