11 EU General Budgets
| (a)
(35118)
—
SEC(13) 370
(b)
(35119)
—
SEC(13) 370
(c)
(35120)
—
SEC(13) 370
(d)
(35121)
—
SEC(13) 370
(e)
(35232)
12769/13
COM(13) 557
(f)
(35259)
12770/13
COM(13) 559
(g)
(35319)
13822/13
COM(13) 644
(h)
(35340)
14093/13
COM(13) 669
(i)
(35354)
14453/13
COM(13) 692
(j)
(35355)
14454/13
COM(13) 691
(k)
(35510)
15054/13
COM(13) 719
|
Statement of estimates of the Commission for 2014 (Preparation of the 2014 Draft Budget): Document I: Political Presentation
Statement of estimates of the Commission for 2014 (Preparation of the 2014 Draft Budget): Document II: Financial programming 2014-20 (Provisional figures)
Statement of estimates of the Commission for 2014 (Preparation of the 2014 Draft Budget): Document III: Figures by MFF heading, section and budget line
Statement of estimates of the Commission for 2014 (Preparation of the 2014 Draft Budget): Document IV: Changes in the budgetary remarks and establishment plan staff
Draft Amending Budget No. 7 to the General Budget 2013: General statement of revenue: Statement of expenditure by section: Section III: Commission
Draft Decision on mobilisation of the Flexibility Instrument
Amending letter No.1 to the draft general budget 2014: Statement of expenditure by section: Section III: Commission
Draft Amending Budget No. 8 (DAB2 bis) to the General Budget 2013: General statement of revenue: Statement of expenditure by section: Section III — Commission
Draft Decision on mobilisation of the EU Solidarity Fund
Draft Amending Budget No. 9 to the General Budget 2013: General statement of revenue: Statement of expenditure by section: Section III — Commission
Amending Letter No. 2 to the draft general budget 2014: Statement of expenditure by Section: General Statement of revenue; Section I: Parliament; Section II — European Council and Council; Section III: Commission; Section IV: Court of Justice of the European Union; Section V: Court of Auditors; Section VI: European Economic and Social Committee; Section VII: Committee of the Regions; Section VIII: European Ombudsman; Section IX: European Data Protection Supervisor; Section X: European External Action Service
|
| Legal base | Article 314 TFEU and 106a, EURATOM Treaty; co-decision; QMV
|
| Document originated | (g) 18 September 2013
(k) 16 October 2013
|
| Date deposited | (g) 25 September 2013
(k) 13 November 2013
|
| Department | HM Treasury
|
| Basis of consideration | Minister's letters of 8 and 20 November 2013
|
| Previous Committee Reports | (a)-(d) HC 83-xii (2013-14), chapter 1 (17 July 2013) and HC 83-xiii (2013-14), chapter 3 (4 September 2013)
(e)-(f) HC 83-xiii (2013-14), chapter 20 (4 September 2013) and HC 83-xvii (2013-14), chapter 7 (16 October 2013)
(h)-(j) HC 83-xviii (2013-14), chapter 18 (23 October 2013)
(g) and (k) None
|
| Discussion in Council | (a)-(d) 11 November 2013
(e)-(f) 7 October 2013
(h)-(j) 30 October 2013 (written procedure)
(g) and (k) 11 November 2013
|
| Committee's assessment | Politically important
|
| Committee's decision | (a)-(d) Cleared after debate in European Committee B on 21 October 2013,[54] further report awaited
(e)-(f) Not cleared; further information requested
(h)-(j) Cleared (decision reported 23 October 2013)
(g) and (k) Cleared
|
Background
11.1 The Draft Budget (DB), documents (a)-(d), sets out the
Commission's proposals for EU expenditure in 2014. It is the first
stage in the annual process of establishing the EU's General Budget
for the following year and provides the basis for negotiations
between the two arms of the Budgetary Authority (the Council and
the European Parliament). On our recommendation the DB was debated
in European Committee B last month.[55]
11.2 During the course of a financial year the
Commission presents to the Budgetary Authority Draft Amending
Budgets (DABs) proposing increases or reductions for revenue and
expenditure in the current EU General Budget — there are
normally about ten DABs each year.
11.3 The Interinstitutional Agreement of 17 May
2006 on EU budgetary and financial management allows mobilisation
of a Flexibility Instrument to meet financing of clearly identified
expenditure which could not be financed within the limits of the
ceilings available for one or more Headings of the Multiannual
Financial Framework (MFF).
11.4 The European Social Fund (ESF), one of the
Structural Funds, is the EU instrument for supporting jobs, helping
people get better jobs and ensuring fairer job opportunities for
all EU citizens. The ESF finances programmes intended to improve
the job prospects of millions of Europeans, in particular those
who find it difficult to secure employment. Amongst the Conclusions
of the June European Council was that, in seeking to improve youth
employment, use should be made of the Structural Funds, with particular
focus on the ESF.[56]
11.5 DAB No. 7/2013, document (e), concerned
an increase of €150 million (£125 million) in commitment
appropriations in Heading 1b of the current MFF. The intention
was to increase the ESF in order to allow further commitment allocations
in 2013 for France, Italy and Spain "as a contribution to
the special effort needed to address the specific situations of
unemployment, in particular youth unemployment, and of poverty
and social exclusion in these Member States". The Commission
proposed that the increase in commitment appropriations would
be covered by the margin under the ceiling of Heading 1b, that
is €16 million (£13 million), and by mobilisation of
the Flexibility Instrument for €134 million (£112 million),
as proposed with the draft Decision, document (f).
11.6 When we last considered these two documents
we heard that DAB No. 7/2013 had secured approval in Coreper,
with the UK abstaining, on scrutiny grounds, together with Sweden
and the Netherlands, and noted an explanation as to the rationale
for the DAB and its relationship to the negotiation of the next
MFF. However, we found the Government's comments in relation to
the Flexibility Instrument and developments on the proposals less
clear. So we asked for answers to three questions. First, we asked,
given the qualified majority which had emerged on the DAB, what
was the position in relation to the draft Decision on the Flexibility
Instrument? Secondly, did the Government believe there was scope
for transferring commitment appropriations from elsewhere in the
2013 Budget, rather than having recourse to the Flexibility Instrument?
Thirdly, given that we were told that the Government would continue
to press the Commission to respect the February European Council
conclusions on use of the Flexibility Instrument, did this mean
that that the Government had voted, or would be voting, against
the draft Decision? Pending receipt of this further information
the documents again remained under scrutiny.[57]
11.7 In March the Commission presented DAB No.
2/2013, which sought significant increases in payment appropriations,
which the Commission claimed were necessary to meet legal obligations
arising from claims left unpaid at the end of 2012, as well as
to absorb pressures which it expected to arise in 2013. Consideration
of this DAB became enmeshed in the negotiation of the MFF for
2014-20. Following agreement in the June European Council on the
MFF package[58] the DAB
was partially agreed at the 9 July ECOFIN Council —
the UK, along with Denmark, Finland, the Netherlands and Sweden,
having voted against it. There was also a Council commitment related
to this issue to consider a further DAB in the autumn. Of the
€11.2 billion (£9.4 billion) requested by the Commission
the Budgetary Authority approved €7.3 billion (£6.1
billion).[59]
11.8 DAB No. 8/2013 (presented as "DAB2
bis"), document (h), concerned an increase of payment appropriations
of €3.9 billion (£3.3 billion) across Headings 1a, 1b,
2, 3a, 3b and 4 of the MFF. The Commission asserted that this
money was needed to meet outstanding needs to the end of the year
¯
to ensure that legal obligations stemming from past and current
commitments could be honoured, that financial penalties be avoided
and that beneficiaries could receive the funds envisaged by the
agreed EU policies. It also claimed that this DAB updated DAB
2/2013.
11.9 The EU Solidarity Fund was established in
2002 to allow the EU to respond effectively to major natural disasters
affecting Member States or candidate countries. The Fund is available
when a country is affected by a major natural disaster that has
serious effects on the living conditions, natural environment
or the economy of one or more regions of that country (or exceptionally,
in a neighbouring country).
11.10 The draft Decision on mobilisation of the
EU Solidarity Fund, document (i), concerned two cases. First,
during the summer of 2012 major parts of Romania suffered from
very low precipitation and repeated waves of extremely high temperatures,
leading to drought and forest fires. The Commission proposed that
Romania should be granted €2.5 million (£2.1 million)
from the Fund. With regard to the second case, in May and June
Central Europe was affected by a meteorological situation where
Germany, Austria and the Czech Republic were affected by extreme
flooding. The Commission proposed that Germany should be granted
€360.5 million (£301.4 million), Austria €21.7
million (£18.1 million) and the Czech Republic €15.9
million (£13.3 million) from the Fund.
11.11 DAB No 9/2013, document (j), was presented
by the Commission to cover mobilisation of the EU Solidarity Fund
for Romania, Germany, Austria and the Czech Republic, with additional
commitment and payment appropriations of €400.5 million (£334.9
million).
11.12 When, last month, we considered DABs No.
8/2013, DAB No. 9/2013 and the draft Decision on use of the EU
Solidarity Fund we heard that there had been qualified majorities
for the proposals in Coreper, with the Government voting against.
We presumed that the Government would be voting against these
proposals in the Council. However, given QMV in relation to them
we recognised that, regrettably, the Government would be unable
to prevent their adoption and so cleared the documents from scrutiny.
However, we urged the Government to continue efforts to muster
effective support against similar unacceptable budgetary proposals.
On a broader issue, we noted the very tight timetabling of Council
consideration of these proposals. We asked to hear urgently from
the Government what it was doing to insist that the Commission
and the Council Presidency properly observe the requirements of
Protocol No. 1 to the TEU/TFEU, so facilitating national parliament
scrutiny of Commission proposals.
The new documents
11.13 During negotiation of the annual DB the
Commission may present amendments to its original proposal in
Amending Letters.
11.14 Amending Letter No. 1, document (g), proposes
small revisions to the Commission's original 2014 DB. The key
changes include implementation of the June European Council agreement
on frontloading of Horizon 2020, Erasmus and COSME (Competitiveness
of enterprises and small and medium-sized enterprises) and the
corresponding backloading of CEF (Connecting Europe Facility)-Energy,
ITER (International Thermonuclear Experimental Reactor) and ETC
(European Territorial Cooperation) within the 2014-2020 MFF.
This has no net fiscal effect over the 2014-2020 period. The Amending
Letter also includes additional assistance to Cyprus through €100
million (£84.62) of Structural Funds commitment appropriations
in 2014 to address the particularly difficult situation of Cyprus,
as agreed at the June European Council. The net budgetary impact
of the Amending Letter is an increase in commitment appropriations
of €100 million compared with the DB.
11.15 Amending Letter No. 2, document (k), proposes
further revisions to the Commission's original 2014 DB —
a revision to the forecast of Traditional Own Resources (TOR)
to be received in 2014 and a small downward revision to the Commission's
forecasts for spending needs in 2014 for agricultural expenditure.
The net budgetary impact is a reduction in both commitment and
payment appropriations of €4.9 million (£4.15 million)
compared with the DB.
The Minister's letters
11.16 In her first letter the Economic Secretary
to the Treasury (Nicky Morgan) first responds to our questions
on the DABs, saying that:
- in relation to use of the Flexibility
Instrument for DAB No. 7/2013, documents (e)-(f), the Government
is clear that the February European Council conclusions on the
use of the Flexibility Instrument must be respected —
that is the Commission must not use the Flexibility Instrument
without exhausting options from elsewhere in the budget;
- this was felt to be satisfied on this proposal;
- the UK voted against both DAB No 8/2013 and DAB
No 9/2013, documents (h) and (j), on the 30 October by written
procedure;
- Sweden, the Netherlands and Finland also voted
against DAB No 8/2013; and
- both DABs were approved by qualified majority.
11.17 In relation to timetabling of these sorts
of proposals the Minister says that:
- the Government strongly supports
our view that the Commission and the Council Presidency must properly
observe the requirements of Protocol No. 1 to the TEU/TFEU, to
facilitate and provide sufficient time for national parliament
scrutiny of Commission proposals;
- the Government voiced its strong opposition to
this timetabling in the Council and, on this occasion, it was
able (procedurally) to prevent formal agreement being reached
on the proposals until both Scrutiny Committees of Parliament
had been given time to sufficiently consider the proposals; and
- the Government did not allow the proposals to
be added to existing Council agendas and did not submit its vote
to the Presidency until after both Committees had cleared the
proposals from scrutiny.
11.18 Turning to the 2014 DB, documents (a)-(d),
the Minister tells us that on 23 October the European Parliament
voted to endorse the recommendation of its Budget Committee on
the DB. She attaches a table provided by the European Parliament
setting out its proposal, alongside the Commission and Council
proposals.[60] The Minister
continues that:
- the (TFEU defined) 21 day Conciliation
period began after the European Parliament had voted on its position;
- the first Conciliation meeting took place on
4 November; and
- another Conciliation meeting was scheduled alongside
the Budget ECOFIN Council on 11 November, where it was hoped that
negotiations would be concluded.
11.19 In her second letter the Minister, in addition
to explaining the effects of the two Amending Letters and apologising
for the late deposit of the second, tells us of the final outcome
of the negotiation of the 2014 Budget and gives us some further
information in relation to DAB No 9/2013, document (j).
11.20 The Minister reports that the 11 November
Budget (ECOFIN) Council agreed with the European Parliament the
2014 Budget. She says that:
- the final agreement on the
level of spending was €142.6 billion (£120.7 billon)
in commitment appropriations and €135.5 billion (£114.7
billion) in payment appropriations;
- as a result, the 2014 Budget is almost €9
billion (£7.6 billion) lower than the final budget for 2013,
a 6% reduction in EU spending compared to last year;
- during negotiations the UK maintained its clear
position that any deal should not exceed the ceilings established
in this agreement and indeed should be lower;
- working closely with its budget disciplined allies,
Germany, France, Finland, Austria, Czech Republic, Denmark, Sweden
and the Netherlands, this was achieved;
- the Government, however, wanted to go further
than the final agreement to maintain pressure on EU spending and
to secure a bigger margin between the final payments for 2014
and the MFF ceilings themselves; and
- for this reason, the UK, along with Sweden, the
Netherlands and Denmark did not support, and voted against, the
final deal.
11.21 The Minister encloses a Council press release,
which includes further detail of the final budget figures.[61]
11.22 The Minister tells us that a compromise
proposal on DAB No 9/2013 was also agreed at the Budget Council,
as follows — payment appropriations were split between 2013
and 2014, with €250 million (£212 million) paid from
reprioritised spending from the Global Transfer in 2013 and the
remaining €150 million (£127 million) will be met by
payments from within the adopted 2014 Budget. She comments that
the UK continues to oppose these financing proposals.
11.23 The agreements on the 2014 Budget and DAB
No 9/2013 were formally approved at the General Affairs Council
on 19 November and are being voted on in the European Parliament
November Plenary.
Conclusion
11.24 We note the further information the
Minister gives us about DAB No. 7/2013 and use of the Flexibility
Instrument, documents (e)-(f). However we are unclear as to the
implications of the Minister's statement that the criterion for
use of the Flexibility Instrument "was felt to be satisfied
on this proposal". We should be grateful if she would clarify
whether this means that it was the Government that felt the criterion
to be satisfied and, if so, whether the Government voted for the
proposal. Until we are clear on these points the documents remain
under scrutiny.
11.25 As for the matter of timetabling of
budgetary proposals we note the Government's efforts in this regard.
However, we urge the Government to continue to press the Commission
and the Council Secretariat on the issue, particularly by refusing
to tolerate, not only early voting on such proposals, but also
premature discussion.
11.26 We are grateful to the Minister for
her updates in relation to the 2014 Budget and DAB No. 9/2013.
11.27 We clear the Amending Letters, documents
(g) and (k) from scrutiny, whilst urging the Minister to ensure
for the future that such documents are dealt with expeditiously.
54 Gen Co Debs,
European Committee B, cols 3-12. Back
55
See headnote. Back
56
See http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/137634.pdf. Back
57
See headnote. Back
58
See http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/137634.pdf. Back
59
See (34805) 8041/13: HC 86-xxxix (2012-13), chapter 3 (24 April
2013), HC 83-iv (2013-14), chapter 2 (5 June 2013), HC 83-xiii
(2013-14), chapter 52 (4 September 2013) and Gen Co Debs,
European Committee B, 16 July 2013, cols. 3-26. Back
60
See: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-%2f%2fEP%2f%2fTEXT%2bIM-PRESS%2b20131003IPR21401%2b0%2bDOC%2bXML%2bV0%2f%2fEN&language=EN. Back
61
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/139448.pdf. Back
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