8 General Budget 2013
| (a)
(34778)
7657/13
COM(13) 156
(b)
(34779)
7658/13
COM(13) 157
|
Draft amending budget No 1 to the general budget 2013 — General statement of revenue — Statement of expenditure by section — Section III — Commission
Draft Decision amending the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management as regards the multiannual financial framework, to take account of the expenditure requirements resulting from the accession of Croatia to the European Union
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| Legal base | (a) Articles 314 and 322 TFEU; co-decision; QMV
(b) —
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| Department | HM Treasury
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| Basis of consideration | Minister's letter of 30 June 2013
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| Previous Committee Reports | (a)-(b) HC 83-i (2013-14), chapter 11 (8 May 2013)
(b) HC 83-iii (2013-14), chapter 11 (21 May 2013)
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| Discussion in Council | 26 June 2013
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| Committee's assessment | Politically important
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| Committee's decision | (a) Cleared, decision reported 8 May 2013
(b) Not cleared, pending evidence session with Minister.
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Background
8.1 During the course of a financial year the Commission presents
to the Council and European Parliament Draft Amending Budgets
(DABs) proposing increases or reductions for revenue and expenditure
in the current EU General Budget.
8.2 The 2006 Interinstitutional Agreement (IIA),
between the Council, the European Parliament and the Commission
(which concerns budgetary discipline and sound financial management
in the period 2007-13) — although legally and politically
binding — is not based on any Treaty provision.
8.3 Point 29 of the IIA provides that if new
Member States accede to the EU during the period covered by a
Multiannual Financial Framework (MFF) the Council and the European
Parliament, acting on a proposal from the Commission, will adjust
the MFF to take account of the expenditure requirements resulting
from the accession.
8.4 Croatia acceded to the EU on 1 July and Draft
Amending Budget (DAB) No. 1/2013, document (a), which we cleared
from scrutiny in May, concerned the incorporation of the commitment
and payment appropriations the Commission deemed necessary to
cover expenditure in 2013 related to that accession.
8.5 As a suggested consequence of DAB No. 1/2013
the Commission proposed, as in document (b), an amendment to the
2013 ceilings of the MFF in the IIA to take into account the additional
appropriations required for Croatian accession. The Commission
requested an increase to the ceiling for commitment appropriations
of €666 million (£563.2 million) and for payment appropriations
an increase of €374 million (£316.3 million), both increases
expressed in current prices.
8.6 When in early May we considered the IIA document,
together with the DAB, we noted that the Government was content
with that part of a Presidency compromise which would ensure that
overall commitment ceilings would remain unchanged, but that it
opposed the text that would allow an increase in the payment ceiling.
We said that we presumed that the Government would be voting
against the Presidency compromise and asked the Government whether,
in its view, the matter was subject to QMV or unanimity. Later
in May we had confirmation from the Government that it would vote
against any proposal that increased the overall payment or overall
commitment ceilings in 2013 as set out in the current IIA and
the proposal would have to be agreed by unanimity. We asked to
hear about the outcome of the IIA discussions in due course and
meanwhile document (b) remained under scrutiny.[20]
The Minister's letter
8.7 The Financial Secretary to the Treasury (Greg
Clark), first reminds us that:
- the Government is supportive
of Croatia's accession into the EU;
- the IIA proposal presents an exceptional case
concerning accession of a new Member State;
- the IIA provides for adjustment of the MFF to
take account of the expenditure requirements resulting from an
accession; and
- the UK and a number of other Member States, notwithstanding
the norm, have had some concerns about the element of the proposal
relating to revisions to the overall MFF payment ceiling.
8.8 The Minister then reports that the Government
secured a firm Council declaration which states that the appropriation
increase shall only be spent on programmes relating to Croatia
and which requires the Commission to update the Council on the
implementation of relevant programmes. He tells the Committee
that this declaration reads:
"The decision to revise the payment ceiling
by EUR 374 million is on the basis that this increase is only
used for programmes related to Croatia after its accession. As
part of its consideration of any further amending budget, the
Council will require an update on the implementation of programmes
related to Croatia."
8.9 The Minister continues that:
- according to latest Commission
estimates, Croatia will bring revenues to the EU Budget of €234
million (£197.87 million) (with an additional €34 million
(£28.75 million) financed from the budget line for surplus
own resources resulting from repayment of the surplus from the
Guarantee Fund for external actions), as compared with the required
expenditure of €374 million;
- this leaves a balance which will fall on other
Member States of approximately €100 million (£84.56
million);
- the UK's financing share in this situation is
estimated to be around 12-15%, or £10-12 million in 2013;
- this one-off sum has no implications for the
level of EU spending in the 2014-20 MFF deal; and
- given this statement and the relatively limited
one-year financial implications, the Government concluded that
it was in the UK's interest to support the Presidency's compromise
proposal[21] and not
block the exceptional adjustment at the start of Croatian accession.
8.10 The Minister explains further that:
- given Croatian accession on
1 July, final discussions and a Council vote were to a very tight
deadline;
- negotiations on the Presidency compromise proposal
concluded in COREPER on 26 June and the text was then unanimously
agreed to the same day by the ECOFIN Council, including the UK;
and
- he regrets that these new developments did not
provide the Government with adequate time to "pass through
Parliamentary scrutiny" prior to the agreement at the Council.
Conclusion
8.11 It may well have been on balance in the
UK's interest to agree the Presidency's compromise. However,
acquiesing in the agreement runs directly counter to the absolute
assurance we were given previously, that the Government would
not vote in favour of an increase in the MFF ceiling for payment
appropriations. Therefore, we are inviting the Minister to appear
before us to explain himself. Meanwhile the document remains
under scrutiny.
20 See headnote. Back
21
For this proposal see http://register.consilium.europa.eu/pdf/en/13/st11/st11588.en13.pdf. Back
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