Wednesday, November 30, 2011

Council of The European Union approves 2012 EU budget

Brussels,30 November 2011.17890/11 PRESSE 467. The Council approved today (The decision was taken, without debate, at the Economic and Financial Affairs) Council the EU budget for 2012, as agreed with the European Parliament in the Conciliation Committee on 18/19 November (17470/11 + ADD 1 + ADD 2 + ADD 3 + ADD 4 + ADD 5).  If the Parliament also approves the compromise, the 2012 EU budget is considered to be adopted (The Parliament is expected to take its decision on 1 December)

The total payments for the 2012 EU budget, as agreed with the European Parliament, amount to EUR 129.088 billion. This corresponds to 0.98% of the EU's Gross National Income (GNI) and represents an increase of 1.86% compared to the 2011 EU budget if draft amending budget Nos 6 and 7 are taken into account which are expected to be adopted by the European Parliament in December (+2.02% compared to the 2011 EU budget as amended by amending budgets Nos 1-5 which have already been adopted). As the Commission forecasts an inflation of 2% for the EU in 2012, the budget for next year is hence expected to diminish in real terms. The commitments for 2012 amount to EUR 147.232 billion which corresponds to an increase by +3.54% (+3.57% if draft amending budgets Nos 6 and 7 are excluded). This leaves a margin of EUR 1.4 billion (EUR 1.2 billion if not taking into account the mobilisation of the Flexibility Instrument) below  the ceiling of the multiannual financial framework (MFF).

The Council believes that the EU budget for 2012 strikes the right balance between a strict limitation of its volume, herewith helping member states in their consolidation efforts, and the financing of measures designed to stimulate growth and jobs. The EU made also considerable efforts to limit the increase of its own administrative spending to 1.31% in commitments and 1.30% in payments, compared to the 2011 budget, in spite of new workload due, for instance, to the preparation of the accession of Croatia. The Council decided even to cut its own spending by 5.21% in commitments and payments.

The Council also adopted a decision on the mobilisation of the Flexibility Instrument (17471/11) to complement the financing in the 2012 EU budget, beyond the MFF ceilings. EUR 50 million will be mobilised in sub-heading 1a (competitiveness for growth and employment) and EUR 150 million in heading 4 (the EU as a global player), both in commitments.

Furthermore, the Council approved1 draft amending budget No 6 for the EU budget 2011 as amended by the Conciliation Committee (17472/11), which reinforces commitments by EUR 3.25 million and payments by EUR 200 million and increases revenues by EUR 1.28 billion, resulting in a net decrease in member states' contributions by EUR 1.077 billion for 2011.

The Council also approved2 draft amending budget No 7 for the EU budget 2011 (17473/11), mobilising the EU Solidarity Fund for an amount of EUR 38.0 million in commitments and payments. Its objective is to provide financial assistance to the region of Murcia in Spain (EUR 21.1 million), hit by an earthquake in May 2011, and to the Veneto region in Italy (EUR 16.9 million), affected by torrential rainfalls in autumn 2010.

According to the Lisbon Treaty the Council and the European Parliament have fourteen days (i.e. until 3 December) to approve the compromise reached on the 2012 EU budget during the Conciliation procedure. If the Parliament rejects the agreement, the Commission must submit a new draft budget. Should the budget not be adopted by the beginning of2012, a sum equivalent to not more than one twelfth of the budget appropriations for 2011 or of the draft budget proposed by the Commission, whichever is the smaller, may be spent each month for any chapter of the budget.


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