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13th Aug 2020

EU tables bigger budget for 2011 despite financial crisis

  • The EU wants to spend €131.1 billion euros in 2011 (Photo: Marfis75)

The EU commission on Tuesday (27 April) proposed a 2011 budget of €130 billion, an increase of almost six percent compared to the current year, with funds for poor regions, research and economic recovery getting the biggest boost.

"The draft budget adopted today gives Europe and its citizens incentives to develop an economy for the future: research and innovation, sustainability and inclusion are its cornerstones," EU budget commissioner Janusz Lewandowski said.

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The commission proposes €130.1 billion in real payments to be made next year, an increase of 5.9 percent. On top of that, as much as €142.6 billion could be "committed" in 2011 and cashed in during the following years.

Farm subsidies remain stable at €58.1 billion, representing the budget's biggest slice, while most other spending areas are on the rise, notably regional policy which is set to increase by 14.7 percent to €54.6 billion.

Members of the European Parliament, who have the power to reject the draft budget, raised concern about where the extra spending will come from, with member states slashing their domestic budgets in response to the financial crisis.

"I must admit, I am also not too happy. First of all, I do wonder about the general increase of the budget in times like this," said German liberal MEP Alexander Alvaro.

He urged the EU institutions to make more savings and suggested moving unused funds from agriculture to other parts of the budget.

Mr Lewandowski said he was "neutral" about moving funds and defended the extra expenditure as a "positive message" from Europe, arguing that EU funds will stimulate "the real economy."

The biggest winners of the EU budget are the new member states from central and eastern Europe, while Germany will remain the biggest contributor to the pot.

Cash-strapped Greece is also set to receive some €2.5 billion in regional aid and €700 million in farm subsidies. This money will come on top of the aid package aimed to prevent Greece from defaulting, now being negotiated between Athens, member states and the International Monetary Fund.

EU foreign aid is to fall by 2.4 percent to €7.6 billion, but spending on administration will increase by 4.5 percent to €8.3 billion.

The draft does not yet include the costs for the new diplomatic service to be run by foreign policy chief Catherine Ashton because she has not submitted the figures yet, Mr Lewandowski said. Those amendments could be carried out at a later stage, he added.

A cut in aid for the Palestinian Authority to €200 million was criticised by Socialist Swedish MEP Goran Farm, who noted that the drop was more than total reserve in the commission's foreign-affairs budget.

But Mr Lewandowski said that the sum could be increased over the course of the year.

Meanwhile, the Turkish Cypriot community is set to get almost double the aid it received in 2010, despite their newly elected leader's populist stance which could derail reconciliation talks with the Greek Cypriot part.

The draft budget still has to be agreed by EU governments and approved by the European Parliament.

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