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Brussels, 22 November 2011
Frequently Asked Questions: EU Budget 2012 in a nutshell
In the early hours of Saturday, 19 November 2011, the Council and the European Parliament reached an agreement on next year's EU budget. Below are the main elements of the agreement which still needs to be formally approved by the Council (on 30 November 2011) and by the European Parliament (on 1 December 2011).
What are the final figures for the adopted budget?
The total amount of commitments is more or less what the European Parliament called for (€147.7bn), the total amount of payments is exactly what the Council called for (€ 129,1bn).
Compared to the 2011 budget (with adopted and proposed amendments), commitments increase by 3.54 % and payments by 1.86 %.
The commitments represent 1.12% of the 27 Member States' combined GNI, while payments are 0.98% of their combined GNI.
What exactly is the Council/European Parliament declaration about?
When the Council and the Parliament agreed on the 2012 budget they included four joint statements on specific issues: the first statement (see below) addresses the levels of payments for the budget 2012. A second one adjusts the budget to meet the needs of the mobilisation of the Solidarity Fund for Spain and Italy, the third statement concerns preventive measures for future crisis in the fruit and vegetable sector and the fourth one is on the financing of ITER.
Joint statement on payment appropriations:
"Taking into account the ongoing fiscal consolidation efforts in Member States, the Council and the European Parliament agree on a reduction of the level of payment appropriations for 2012, as compared to the Commission's Draft Budget. They ask the Commission to request additional payment appropriations in an amending budget, if the appropriations entered in the 2012 budget are insufficient to cover expenditure under sub-heading 1a (Competitiveness for growth and employment), sub-heading 1b (Cohesion for growth and employment), heading 2 (Preservation and management of natural resources), heading 3 (Citizenship, freedom, security and justice) and heading 4 (EU as a global player).
In particular, the Council and the European Parliament urge the Commission to present by the end of September 2012, at the latest, updated figures concerning the state of play and estimates regarding payment appropriations under sub-heading 1b (Cohesion for growth and employment) and rural development under heading 2 (Preservation and Management of Natural Resources), and, if necessary, to present a draft amending budget.
The Council and the European Parliament will take position on any draft amending budget as quickly as possible in order to avoid any shortfall in payment appropriations. In addition, the Council and the European Parliament undertake to process swiftly any possible transfer of payment appropriations, including across financial framework headings, in order to make the best possible use of payment appropriations entered in the budget and align them to actual execution and needs."
Why did you discuss the 2011 amending budget 6 in the negotiations on the 2012 budget?
The 2012 budget proposal has, by all institution, been compared to the 2011 budget. For example, the Council in its position in July 2011 called for an amount corresponding to 2011 budget plus 2% increase. The Commission was ready to accept the 2% increase but based on the amended 2011 budget.
Every year in November, when the needs for payments by Member States for the ongoing year are clearer, the Commission issues an amending budget (that can be negative or positive). This year's amending budget stated that we expect to be short of €550M in payments. There are two reasons why it was an issue in the 2012 budget negotiations:
Since the Council, in its position on next year's budget, called for a 2% increase in payments compared to 2011, whether the amending budget 6 were adopted or not, would have changed the basis for calculating that 2% increase.
At last year's negotiations on the annual budget, the Council and the Parliament already agreed on a joint declaration stating that if, following cuts asked for by Council, the Commission found that payments appropriations were insufficient, both arms of the budgetary authority would swiftly address the issue.
The final agreement between the Parliament and the Council, however, accepts only an increase of €200M, falling short of €350M.
Why is the Commission concerned by "the growing gap between commitments and payments"?
The Council and the Parliament agreed that next year's commitments will amount to €147.2bn. This means that the EU will be allowed to sign contracts or commit funding for future projects for up to that amount; in other words, today's commitments are tomorrow's payments. However, in recent years, commitments have increased much faster than payments, which means that just as the Council calls for ever tighter payments year after year, more and more bills for past commitments are landing on the Commission's desk, forcing it to call for more increase in payments.
What about the financing needs of ITER?
ITER (International Thermonuclear Experimental Reactor) is a project bringing together the EU and a number of international partners. The share of the costs for the EU has increased and an extra €1.3bn must be found by 2013, therefore affecting next year's budget.
€100M were included for ITER in budget 2012 (heading 1a). Furthermore, in their joint statement the European Parliament and the Council "agree to meet in a Trilogue with the participation of the Commission, on Wednesday 23 November 2011 afternoon, to address the issue of the additional cost of the ITER project in 2012-2013, in order to arrive at an agreement before the end of the year…".
The European Parliament and the Council invite the Commission to facilitate reaching an agreement on the additional financing needs of the ITER project, taking into account the concerns of both arms of the budgetary authority.