Thursday

7th Jul 2022

Brussels has tough time justifying bigger budget

  • European Commission building in Brussels - the executive says that it is undertaking its own administrative cuts (Photo: guppiefish)

The European Commission on Wednesday (25 April) had an uphill struggle explaining why next year's EU budget needs to go up by 6.8 percent, even as it preaches austerity to member states.

The increase - to €138 billion from €129.1 billion for 2012 - is largely due to promised payments for various projects in member states that are now being called in.

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The finer points of the EU's multi-annual budget system - which sees member states make payment promises only to baulk at actually footing the bill further down the line - are being lost on the EU public however, as Brussels becomes increasingly associated with hypocrisy on spending.

Both European Commission president Jose Manuel Barroso and budget commissioner Janusz Lewandowski made the case for the extra money.

"[It is] not for me. It is for Europe, the regions of Europe and the workers of Europe," Barroso told press in Brussels. Lewandowski noted that 5.6 percent goes towards paying EU salaries and other administrative costs while the rest goes to "Europe."

They pointed out that they have a "legal obligation" - as do member states - to respect all the commitments made when governments approved the projects.

Not paying up will only increase national debt problems, said Barroso, noting that Slovakia's Prime Minister Robert Fico said as much to him during a visit to Brussels on Tuesday.

"[Fico] said: 'Look, we have now made this payment, if the European budget does not cover these payments as has been promised us, our deficit will increase'."

Lewandowski said the gap between "commitments of the past and payments available" is growing. He explained that the accumulated shortfall had reached around €200 billion at the end of 2011, adding that reducing the budget will exacerbate the problem. He suggested that money was going where it is "desperately" needed.

The draft budget proposes €62.5 billion for "job friendly growth" in Europe - of this €49 billion is for structural and cohesion funds, money that goes to the EU's least developed regions. Some €9 billion has been earmarked for research.

The commission suggested the EU will never manage to complete the single market if it is left to member states to take the initiative to make cross-border investments in areas such as energy. "Frankly you will be waiting forever," said Barroso.

It is likely to have a hard fight on its hands in the current political climate.

France has already said the budget draft is "impossible, unjustifiable and unacceptable." The 2013 budget has to be agreed by member states and the European Parliament.

Rising prices expose lack of coherent EU response

The increasingly sharp debate over the rising cost of living exploded in European Parliament, with lawmakers from all stripes, liberal, left, green and conservative, calling on the EU to act.

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