EU governments seek to limit 2011 budget

Seven countries vote against 2.9% increase

EU governments have today agree to limit the EU’s budget for 2011 in terms of payments to €126.53 billion, €3.6bn less than the European Commission proposed in April.

The figure, which was agreed by written procedure on 12 August, would limit the increase in the 2011 budget compared to 2010 to 2.91%. The Commission proposed a budget of €130.14bn, an increase of 5.9% compared to 2010.

Austria, the Czech Republic, Denmark, Finland, the Netherlands, Sweden and the UK voted against the agreement, calling for a lower overall figure or for smaller allocations for certain spending areas.

The main changes agreed by EU governments to the Commission’s proposal were:

– a €891.14 million reduction in funds for programmes designed to boost growth and competitiveness;
– a €1.06 billion reduction in the amount for cohesion funds designed to reduce economic disparities;
– a €820.71m reduction in the amount to support farmers and the fisheries sector;
– a €68.92m reduction in the amount for programmes related to citizenship;
– a €590.9m reduction in the amount available for the EU’s external policies;
– a €162.15m reduction in the funds for administration.

The lower figure agreed by EU governments today puts the Council of Ministers on a collision course with the European Parliament which has already criticised government’s demands for lower spending when they were first discussed in July.

In July, Sidonia Jedrzejewska, a Polish centre-right MEP who is drafting the Parliament’s opinion on the 2011 budget, called Council’s planned cuts an “offence” and a “slap in the face” because they fell most heavily on programmes designed to boost economic growth and job creation.

The Parliament is expected to adopt its position on the 2011 budget in November and will have to reach a compromise with the Council on the overall amount and the allocations for each part of the EU budget.

Under the Lisbon treaty, MEPs can decide spending on all areas of the EU budget including support to farmers and the fisheries sector. In the past, they did not have direct control over these individual allocations, only over the overall amount.