3 EU General Budget 2015: Draft Budget
| Committee's assessment
| Politically important |
| Committee's decision | Not cleared from scrutiny; for debate in European Committee B (decisions reported on 2 July and 3 September)
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| Document details | (a) Draft Amending Budget No. 3 for 2014: (36067), 10340/14, COM(14) 329
(b) Draft Decision concerning finance for the Draft Amending Budget: (36068), 10341/14, COM(14) 328
(c) Draft Decision about the EU Solidarity Fund: (36133), 10946/14, COM(14) 348
(d) Draft Decision about the budgetary Flexibility Instrument: (36134), 10947/14, COM(14) 349
(e)-(h) Statement of estimates of the Commission for 2015, Parts I-IV: political presentation, financial programming 2016-2020 (provisional figures), figures by Multiannual Financial Framework heading, section and budget line and changes in the budgetary remarks and establishment plan staff: (36139)-(36142), —, SEC (14) 357
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| Legal base | (a)-(b) Article 314 and Article 106a EURATOM; co-decision; QMV
(c)-(d) Article 295 TFEU; co-decision; QMV
(e)-(h) Article 314 TFEU; co-decision; QMV
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| Department | HM Treasury
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Summary and Committee's conclusions
3.1 The Draft Budget (DB) sets out the Commission's
proposals for EU expenditure in 2015. In the DB the Commission
proposes commitment appropriations of €145,999.3
million (£118,386.8 million), which represents 1.04% of EU
Gross National Income (GNI). For payment appropriations, the Commission
proposes €142,137.2 million (£115,571.8 million), or
1.02% of EU GNI.
3.2 The Interinstitutional Agreement on budgetary
matters provides the possibility of finance for ("mobilisation
of") the EU Solidarity Fund, which releases emergency financial
aid following a major disaster in a Member State or candidate
country, and the Flexibility Instrument, which provides funding
in a given financial year for clearly identified expenses which
could not be covered by one or more budget headings without exceeding
their expenditure ceilings. The first two draft Decisions would
mobilise the EU Solidarity Fund and the Flexibility Instrument
for sums included in the DB.
3.3 During the course of a financial year the Commission
presents Draft Amending Budgets (DABs) proposing increases or
reductions for revenue and expenditure in the current EU General
Budget. The Contingency Margin is a mechanism set out in the Multiannual
Financial Framework (MFF) Regulation, which allows for mobilisation
of 0.03% of GNI for all Member States to react, as a last resort,
to unforeseen circumstances. With DAB No. 3/2014, the Commission
asks for an increase in payment appropriations of €4,738
million (£3,853 million) in 2014. These appropriations would
be partially funded by mobilisation of the Contingency Margin
by the third draft Decision.
3.4 We have recommended these eight documents for
debate in European Committee B.
3.5 The Government now tells us that the Council
has formally agreed its position on the 2015 DB, calling for a
budget of €140.0 billion (£112.2 billion) in payment
appropriations, which represents a €2.1 billion (£1.7
billion) cut to the Commission's DB, and provides for a margin
of €1.9 billion (£1.5 billion) under the 2015 ceiling
set out in the MFF.
3.6 We are grateful for this additional, albeit
limited, information. We trust that in the debate we have recommended
the Government will spell out exactly which parts of the proposed
budget it has not managed to limit as much as desirable and what
threat to overall budgetary restraint is posed by the DAB.
3.7 We take this opportunity to remind the Government
that this debate must take place as soon as practically possible,
and certainly before the European Parliament's first reading of
the DB.
Full details of the documents:
(a) Draft Amending Budget to the General Budget 2014: General
statement of revenue; Statement of expenditure by section: Section
III — Commission, Section VII — Committee of the Regions
and Section IX — European Data Protection Supervisor: (36067),
10340/14, COM(14) 329; (b) Draft Decision on the mobilisation
of the Contingency Margin in 2014: (36068), 10341/14, COM(14)
328; (c) Draft Decision on the mobilisation of the EU Solidarity
Fund: (36133), 10946/14, COM(14) 348; (d) Draft Decision on the
mobilisation of the Flexibility Instrument: (36134), 10947/14,
COM(14) 349; (e) Statement of estimates of the Commission for
2015 (Preparation of the 2015 Draft Budget), Document I, Political
presentation: (36139), —, SEC(14) 357; (f) Statement of
estimates of the Commission for 2015 (Preparation of the 2015
Draft Budget), Document II, Financial programming 2016-2020 (provisional
figures): (36140), —, SEC(14) 357; (g) Statement of estimates
of the Commission for 2015 (Preparation of the 2015 Draft Budget),
Document III, Figures by MFF heading, section and budget line:
(36141), —, SEC(14) 357; (h) Statement of estimates of the
Commission for 2015 (Preparation of the 2015 Draft Budget, Document
IV, Changes in the budgetary remarks and establishment plan staff:
(36142), —, SEC(14) 357.
Background
3.8 The Draft Budget (DB), documents (e)-(h), sets
out the Commission's proposals for EU expenditure in 2015. It
is the first stage in the annual process of establishing the EU's
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). The context for the DB is determined
by the Multi-annual Financial Framework (MFF) for the period 2014-20,
which sets out annual ceilings for the six headings of budget
expenditure.
3.9 In the DB the Commission proposes commitment
appropriations of €145,999.3 million (£118,386.8
million), which represents 1.04% of EU Gross National Income (GNI).
For payment appropriations, the Commission proposes €142,137.2
million (£115,571.8 million), or 1.02% of EU GNI.
3.10 The Commission suggests a total 2014 Budget,
taking account of some amendments, since proposed or adopted,
of €140,242.7 million (£114,031.3 million) in payment
appropriations. It says that the DB represents an increase in
commitment appropriations of €2,959.2 million (£2,406.1
million) or 2.1% compared to 2014 levels and an increase of €1,894.6
million (£1,540.5 million) or 1.4% in payment appropriations
compared to that 2014 Budget. The margin under the MFF ceiling
is €1,478.9 million (£1,202.5 million) for commitment
appropriations. There is no margin for payment appropriations.
3.11 The Interinstitutional Agreement on budgetary
matters provides the possibility of finance for ("mobilisation
of") the EU Solidarity Fund, which releases emergency financial
aid following a major disaster in a Member State or candidate
country, and the Flexibility Instrument, which provides funding
in a given financial year for clearly identified expenses which
could not be covered by one or more budget headings without exceeding
their expenditure ceilings. The draft Decisions, documents (c)-(d)
would mobilise the EU Solidarity Fund and the Flexibility Instrument
for sums included in the DB.
3.12 It is our custom, and that of our predecessors,
to recommend the Draft Budget for debate before the Council concludes
its first reading. Given the late adoption of the 2015 Draft Budget
by the Commission and the forthcoming Recess, we noted that timing
was unlikely to be possible this year. Nevertheless, we recommended
that the 2015 Draft Budget and the two associated draft Decisions
be debated in European Committee B as soon as practically possible,
and certainly before the European Parliament's first reading.
3.13 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. The Contingency
Margin is a mechanism set out in the MFF Regulation, which allows
for mobilisation of 0.03% of GNI for all Member States to react,
as a last resort, to unforeseen circumstances.
3.14 With document (a), DAB No. 3/2014, the Commission
asks for an increase in payment appropriations of €4,738
million (£3,853 million) in 2014. These appropriations are
requested through two routes. First is a mobilisation of the Contingency
Margin by the draft Decision, document (b). The request for mobilisation
of the Contingency Margin is for the full potential amount available,
calculated by the Commission as €4,026 million (£3,274
million). The Commission proposes that the remainder of the payment
appropriations in this DAB come from the unallocated in-year margin
between the agreed budget for 2014 and the annual payment ceiling
set out in the MFF for 2014-20. The Commission specifies this
margin as €711 million (£578 million).
3.15 When we considered these documents for a second
time, earlier this month, we noted the Government's view that
these proposals were unacceptable, particularly in relation to
the proposed use of the Contingency Margin, and that Council consideration
of them was now linked to negotiation of the 2015 DB. Accordingly
we recommended that these documents should be debated in in European
Committee B with the DB and the other documents.
The Minister's letter of 3 September 2014
3.16 The Financial Secretary to the Treasury (Mr
David Gauke) now tells us that:
· on 15 July, Coreper reached an agreed
Council position on the 2015 DB, calling for a budget of €140.0
billion (£112.2 billion) in payment appropriations;
· this represents a €2.1 billion (£1.7
billion) cut to the Commission's DB, and provides for a margin
of €1.9 billion (£1.5 billion) under the 2015 ceiling
set out in the MFF;
· in Coreper, there was no formal vote as
it was clear that a qualified majority was in place to support
the Council position;
· the UK's Permanent Representative indicated,
on instruction, that had there been a vote, the Government would
have abstained on both substantive and parliamentary scrutiny
grounds and regretted that greater cuts were not found;
· the Government does, however, welcome
that this position supports the overall delivery of the Prime
Minister's deal on the MFF; and
· the Government has now voted formally
via Council written procedure, which had a deadline of 2 September,
and abstained on both substantive and scrutiny grounds.
3.17 The Minister adds that the Government now expects
that DAB No. 3/2014 will be discussed alongside the negotiations
on the 2015 annual budget in the autumn.
Previous Committee Reports
Fourth Report HC 219-iv (2014-15), chapter 5 (25
June 2014), Fifth Report HC 219-v (2014-15), chapter 3 (2 July
2014) and Ninth Report HC 219-ix (2014-15), chapter 4 (3 September
2014).
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