- The 2013 budget has just been approved by the 27 member states, but no agreement was reached on the 2014-2020 multiannual financial framework (MFF).
- Net contributors do not want to participate further in common policies as they concentrate on reducing national public deficits.
- These disagreements show that a Federal Europe is still a long way off.
Negotiations over the Multiannual Financial Framework (MFF) revealed fierce disagreements between member states within the European Union (EU). Although the 2013 budget was finally approved after fierce negotiations, the stumbling blocks were the same: certain net contributors, notably the UK, refuse to increase their participation in EU financing.
The broad outlines of the budget
In 2012, the European budget amounted to €129bn and accounted for 1% of EU GDP. The budget is voted every year, but falls within a Multiannual Financial Framework (MFF) covering a 7-year period. One of the key principles of the European budget is that it must not generate a deficit. A balanced budget is achieved using the EU’s own resources.
Also called traditional resources, they are comprised of revenue from customs duties, which are transferred entirely to the EU, and tax revenue from sugar producers in exchange for European market protection for the sector. In addition to these resources, each member country contributes through an annually fixed share of its Gross National Income (GNI) – currently 0,71% - as well as 0.3% of its VAT revenue (which base is capped at 0,5% of the countries’ GNI).
BY Jean-Luc PROUTAT
To Read the Entire Report Please Click on the pdf File Below.