Development of the budget of European Union

Transcription

1 Development of the budget of European Union Nordic-Baltic meeting of foreign affairs coordinators Association of Estonian Cities (AEC) Tallinn, 4-5 April 2013 UNO SILBERG, Dr (Econ)

2 AGENDA 1. Nature and development of the European Union. 2. The development of the European Union Financial System. 3. The Multiannual Financial Framework Some conclusions. Uno Silberg, Dr (Econ)

3 The European Union today is not what it was yesterday, and tomorrow's not what it is today.. formation Eurotam EEC EC EU EU ECSC CAP 1962 Elimination of customs duties 1967 ESF 1971 ERM 1972 ERDF 1974 Common market 1993 Uno Silberg, Dr (Econ)

4 Snowball integration in the European Union REFORM TREATY 2007 Lissbon Treaty 2009 Rome 2004 TECE 2003/2004 Nice 2000 Amsterdam 1999 Maastricht 1993 EC 1967 Rome 1957 / EEC /Eurotam 1958 ECSC 1952 Citizenship Schengen Anthem Flag 'Europe Day 9. May The single currency - euro Single market Econimic / Customas Union European Union Monetary Union Federation...??? Common foreign and security policymaking Common defense bases Legal personality Uno Silberg, Dr (Econ)

5 Reform (Lisbon) Treaty, amending the existing Treaties IGC 2004 Constitution for Europe Treaty of Nice 2001 Treaty of Amsterdam 1999 IGC 2004 Treaty on the European Union 1993 Single Act 1986 Treaty on the European Union 2009 Treaty of Lisbon Treaty establishing the European Community 1958 Treaty on the Functioning of the European Union 2009 Uno Silberg, Dr (Econ)

6 Towards unification of the budgetary instruments The 1951 ECSC Treaty provided for an administrative budget and an operating budget (with validity period limited to 50 years: to 2002). The 1957 Euratom Treaty set up an administrative budget and a research and investment budget. The 1957 EEC Treaty established a single budget. The 1965 Merger Treaty incorporated the ECSC and Euratom administrative budgets into the EEC budget. The 1970 Luxembourg Treaty incorporated the Euratom research and investment budget into the general budget. Between : two budgets co-existed: the general and ECSC operating budget. Uno Silberg, Dr (Econ) Source: European Union Public Finance 2008: 16

7 The crisis in the Community's finances ( ) The budgets for 1980, 1985, 1986 and 1988 were not adopted until the financial year was well under way, so that the provisional-twelfths arrangements had to be applied for periods of five to six months. There were three reasons for this state of affairs: the climate of conflict in relations between the institutions; the question of budgetary imbalances; the inadequacy of resources to cover the Community's growing needs. Source: European Union Public Finance 2008 Uno Silberg, Dr (Econ)

8 Reform of the Community's finances: the Delors I package ( ) Own resources A new concept: the global own resources ceiling The total amount of available own resources was no longer determined by the yield of traditional own resources combined with the ceiling of the VAT-based resource, but was expressed as a percentage of the Community's total GNP, increasing from 1.15 % for 1988 to 1.20 % for A further overall ceiling of 1.30 % of total Community GNP was set for 1992 in terms of appropriations for commitments. Source: European Union Public Finance 2008 Uno Silberg, Dr (Econ)

9 Consolidation of the 1988 reform: the Delors II package ( ) Updating the financial framework Major implications: to take account of the financial impact of the reform of the common agricultural policy which started in 1992; to take stock of the reform of the Structural Funds and to adopt a new regulation, since the framework established in 1988 would be expiring at the end of to guarantee the development of the policies needed for the internal market to run smoothly and to provide the Community with sufficient resources to meet its new international responsibilities. Source: European Union Public Finance 2008 Uno Silberg, Dr (Econ)

10 Community GDP, public expenditure by Member States and Community expenditure (million euro) Uno Silberg, Dr (Econ)

11 Agenda 2000 package ( ) Apart from establishing a new financial framework (taking into account the financial impact of the forthcoming enlargement), major decisions had to be taken on the reform of the CAP and structural operations. There was far greater concern about imposing tight budget management, in connection with the establishment of monetary union. A number of Member States were very insistent on the issue of their net contribution to the Union budget, whereas in 1992 such demands had been more moderate. Source: European Union Public Finance 2008 Uno Silberg, Dr (Econ)

12 Uno Silberg, Dr (Econ)

13 % of GNP/ GNI 1,40% OR: Ceilings for commitments enlargement enlargements 1,35% 1,30% Ceiling (1.31%) for commitments 1,25% 1,20% 1,15% Budget Shift from GNP to GNI Ceiling fin. framework 1,10% 1,05% Eur. Council December ,00% 0,95% Uno Silberg, Dr (Econ)

14 OR: Ceilings for payments % of GNP/ GNI enlargement enlargements 1,33% 1,28% Shift from GNP to GNI Own Resources ceiling (1.24%) 1,23% 1,18% 1,13% FP ceiling 1,08% 1,03% Budget Eur. Council December ,98% 0,93% Uno Silberg, Dr (Econ)

15 Source: EC SEC (2010) 7000 final ( ) Uno Silberg, Dr (Econ)

16 A new own resources system Commission proposal : End statistical VAT own resource as of 2014 Introduce 2 new own resources Financial Transaction Tax EU VAT Radically simplify the system of corrections Developments in the European Union membership fee MEMBER STATE MEMBER STATE Legal Entities Source: European Commission MEMBER STATE Legal Entities ? Individuals Uno Silberg, Dr (Econ)

17 Uno Silberg, Dr (Econ)

18 Allikas: DG ARD Uno Silberg, Dr (Econ)

19 MFF, EU Budget = policy in numbers Challenges Lisbon Treaty : more responsibilities Connect Europe better Social, economic disparities Unstable neighborhood Austerity climate Financial crisis interventions Response to natural disasters Ensure synergies to prove EU Value-added Responses European logic fully geared to Europe 2020 strategy Modernised budget - output oriented, simplification, conditionality, leveraging investment Limited in size, but redesigned - savings in some areas - more to areas that matter - multi-purpose expenditure Budgetary rigour, administrative limits New legitimacy of traditional policies MORE EUROPE FOR THE SAME ONEY! Source: European Commission

20 The 5 targets for the EU in 2020 Source: Uno Silberg, Dr (Econ)

21 MFF - timing of negotiations: 2011: Preparatory work under PL presidency June 2012 (DK pres) : European Council level December 2012 (CY pres): Agreement on new MFF regulation between European Parliament and Council 2013: Adoption by co-decision of new legal bases Source: European Commission Uno Silberg, Dr (Econ)

22 Modernised budget Connecting Europe Facility Innovative financial instruments Key changes in research, cohesion, agriculture and external action Administrative rigour Simplification New Own resources Simplified system of corrections Source: European Commission Uno Silberg, Dr (Econ)

23 The European Council has concluded on the MFF for on 7-8 February The MFF comprises of primarily six headings, namely; 1. Smart and inclusive Growth, 2. Sustainable growth: Natural resources, 3. Security and Citizenship, 4. Global Europe, 5. Administration, 6. Compensation. The Administrative heading covers administrative expenditure of all Institutions, i.e. even those that the European Parliament and the Committee of the Regions would call "political", such as all budget lines related to members, political groups including all the political activities and actions. Uno Silberg, Dr (Econ)

24 MULTIANNUAL FINANCIAL FRAMEWORK (EU-28) (EUR million prices) COMMITMENT APPROPRIATIONS Total Smart and Inclusive Growth a: Competitiveness for growth and jobs b: Economic, social and territorial cohesion Sustainable Growth: Natural Resources of which: Market related expenditure and direct payments Security and citizenship Global Europe Administration of which: Administrative expenditure of the institutions Compensations TOTAL COMMITMENT APPROPRIATIONS as a percentage of GNI 1,03% 1,02% 1,00% 1,00% 0,99% 0,98% 0,98% 1,00% TOTAL PAYMENT APPROPRIATIONS as a percentage of GNI 0,98% 0,98% 0,97% 0,92% 0,93% 0,93% 0,91% 0,95% OUTSIDE THE MFF Total Emergency Aid Reserve European Globalisation Fund Solidarity Fund Flexibility instrument EDF TOTAL OUTSIDE THE MFF as a percentage of GNI 0,03% 0,04% 0,04% 0,04% 0,04% 0,04% 0,04% 0,04% TOTAL MFF + OUTSIDE MFF as a percentage of GNI 1,06% 1,06% 1,04% 1,04% 1,03% 1,02% 1,02% 1,04% Source: EUCO 37/13 Uno Silberg, Dr (Econ)

25 MULTIANNUAL FINANCIAL FRAMEWORK EAGGF Guarantee 1. Common agricultural policy 2. Structural operations 3. Policies with multiannual allocations (IMPs, research) 4. Other policies of which: noncompulsory 5. Repayments and administration (including financing of stock disposal) 2. Structural operations *Structural Funds *Cohesion Fund *EEA financial mechanism 1. Agriculture 1a: Common agricultural policy 1b: Rural development 2. Structural actions *Structural Funds *Cohesion Fund Uno Silberg, Dr (Econ) Sustainable growth 1a: Competitiveness for growth and employment 1b: Cohesion for growth and employment 2. Preservation and management of natural resources *of which market related expenditure and direct payments 3. Internal policies 3. Internal policies 3. Citizenship, freedom, security and justice 1. Smart and Inclusive Growth 1a: Competiveness for growth and jobs 1b: Economic, social and territorial cohesion 2. Sustainable Growth: Natural Resources *of which: market related expenditure and direct payments 3. Security and citizenship 4. External action 4. External action 4. The EU as a global partner 4. Global Europe 5. Administrative expenditure 5. Administration 5. Administration 5. Administration 6. Monetary reserve 6. Reserves 6. Reserves 6. Compensations 6. Compensations 7. Compensation 7. Pre-accession strategy *Agriculture *Pre-accession structural instrument *PHARE (applicant countries) 8. Compensation OUTSIDE THE MFF *Emergency Aid Reserve *European Globalisation Fund *Solidarity Fund *Flexibility instrument *EDF 25

26 Analysis of the Council Conclusions on the Multiannual Financial Framework (EUR million 2011 prices) MFF MFF- EUCO Difference to the current MFF level 1) Smart and Inclusive Growth 445, ,763 5,272 1a) Competitiveness for growth and jobs 90, ,614 34,939 1b) Economic, social and territorial cohesion 354, ,149-29,666 Cohesion Fond 71,021 66,362-4,659 Less develop Regions 204, ,279-40,087 Transition Regions 14,494 31,677 17,183 Outermost Regions 1,387 Developed Regions 56,06 49,492-6,568 European Territorial Cooperation 8,87 8,948 0,078 2) Sustainable growth: natural resources 421, ,179-47,953 Market related expenditure and direct payments 336, ,851-58,834 Rural Development 84,447 85,086 0,639 3) Security and citizenship 12,366 15,686 3,32 4) Global Europe 56,815 58,704 1,889 5) Administration 56,895 61,629 4,734 Administrative expenditure 49,798 6) Compensations TOTAL 993, ,988-33,631 Uno Silberg, Dr (Econ)

27 Analysis of the Council Conclusions on the Multiannual Financial Framework (EUR million 2011 prices) 440 MFF MFF- EUCO Difference to the current MFF level Uno Silberg, Dr (Econ)

28 Conclusions? Multiannual Financial Framework = (EUR million 2011 prices) 1. At least 20% of the costs of climate-related objectives 2. The biggest losers: 1. Market related expenditure and direct payments Less develop Regions Economic, social and territorial cohesion Winners: 1. Competitiveness for growth and jobs (including the CEF) Transition Regions (75%-90% DGP) Conclusions? Uno Silberg, Dr (Econ)

29 Conclusions The are big losers in the MFF especially poor regions and also agriculture: this will have an effect as the poor areas will not develop as fast as they should and in agriculture this could have an impact on food costs which may have to rise. It is important that we look at ohter measures to be able to cover some of lack of investment wich may now arise in the outlined areas. A budget agreed finally would be better and give more stability to regions than no budget agreed. Uno Silberg, Dr (Econ)

30 Difference to the current MFF level (EUR million 2011 prices) 40 34, , ,272-4,659-6,568 0,078 0,639 3,32 1,889 4, , , , ,834 Uno Silberg, Dr (Econ)

31 MFF : List of programmes adjusted post European Council conclusions Uno Silberg, Dr (Econ) Source: Indicative breakdown EC conclusions

32 Source: Indicative breakdown EC conclusions Uno Silberg, Dr (Econ)

33 EUROPEAN PARLIAMENT REACTION: the EP voted a week of the 11 March 2013 on the MFF. The main aspects are: Parliament rejects the 8 February European Council conclusions in their current form. Payment shortfalls: Parliament will not start negotiations on the MFF until the Commission comes forward with an Amending Budget devoted to covering all unpaid payment claims for 2012 and will not conclude these negotiations before the final adoption of this Budget by Council and Parliament. It also wants a political undertaking from the Council that all bills falling due in 2013 will be paid in 2013, so as to avoid "rolling over" a deficit into the new MFF. Flexibility: Parliament insists on maximum overall flexibility between and within headings, as well as between financial years to fully utilise the available margins of each heading. Uno Silberg, Dr (Econ)

34 Review: Parliament also calls for a review of MFF spending, so as to give the newly-elected Parliament and Commission an opportunity to influence the budgets. Own resources: Parliaments calls for the reduction of the share of GNI-based contributions to the EU budget to a maximum of 40 % and phasing out of all existing rebates and correction mechanisms. Also, revenues from the Financial Transaction Tax should be allocated at least partly to the EU budget as a genuine own resource. Unity: Parliament insists that the principle of the unity of the EU budget be recalled and clearly defined in the Interinstitutional Agreement. All expenditure and revenue resulting from decisions taken by, or in the name of, the EU institutions must be summarised in a document annexed every year to the Draft Budget. Uno Silberg, Dr (Econ)

35 A few grains General situation in the EU - we are at a crossroads. MFF - do not agree that there is a lot of national interests. Continuous correction the national governments and parliaments mistakes. We have to defend the idea of the European Union. The EU needs economic growth. Lets to survival. Tuesday, 12 March 2013 Meeting of the CoR Conference of Presidents with President Van Rompuy and Commissioner Hahn Uno Silberg, Dr (Econ)

36 Thank you for your attention! Uno Silberg, Dr (Econ)