Archive pour juin 2011

Myths about the EU budget and the Multiannual Financial Framework

Mercredi 29 juin 2011

This article recalls the real figures to correct errors that are often echoed about the EU budget.

1. The EU budget is enormous.
No, it is not.

The EU budget was around € 140 billion in 2011, which is very small compared to the sum of national budgets of all 27 EU Member states, which amount to more than € 6,300 billion. In other words, total government expenditure by the 27 Member States is almost 50 times bigger than the EU budget!

To put this in perspective, the average EU citizen paid only 67 cents on average per day to finance the annual budget in 2010. This is less than half the price for a cup of coffee – hardly a large expense given the huge benefits that the EU brings citizens.

In fact, the EU budget is smaller than that of the budget of a medium-sized Member State like Austria or Belgium.

You can also look at it another way: the EU budget represents around 1% of EU-27 Gross Domestic Product – the total value of all goods and services produced in the EU – whereas Member States’ budgets account for 44% of GDP on average.

The EU budget is always balanced, which means no single euro is spent on debt. And 94% of what is paid into the EU budget is spent in Member States on policies and programmes that benefit citizens directly.

2. The EU budget is constantly on the rise – whereas national governments reduce their spending.

National budgets are NOT decreasing, they are increasing:

Between 2000 and 2010, national budgets in the EU increased by 62 % while EU budget increased by 37% over the same period.
In 2011, 23 national budgets out of 27 are increasing.
In 2012, 24 national budgets out of 27 are due to increase according to the latest estimations.
3. The bulk of EU expenditure goes on administration.
This is absolutely wrong. The EU’s administrative expenses amount to less than 6% of the total EU budget, with salaries accounting for around half of that 6%.

More than 94% of the European budget goes to citizens, regions, cities, farmers and businesses. The EU budget focuses on bringing growth and jobs, tackling climate change, migration, cross-border crime and other challenges that affect us all. It helps boost prosperity, for example by better interconnecting Europeans through energy, transport and ICT infrastructure, by supporting less well-off regions to create growth and jobs both there and in the rest of the EU, and by pooling our efforts in areas like research. It is also about securing our own food supply. And finally, it is about making the EU’s size count in the world - just as the US and China make their size count, and pooling our efforts to help the world’s poorest people.

The salaries are paid to staff delivering and managing valuable EU policies that have a direct positive impact on citizens.

Think of air traffic liberalisation, passenger rights or cheaper roaming charges. Or think of the Commission’s decisions in antitrust and cartel cases, where consumers have been cheated of millions of euros through illegally inflated prices. In 2010, the estimated customer benefits resulting from the Commission’s cartel decisions was at least €7.2 billion.

Commission staff are in charge of negotiating trade agreements that help to bring down prices of consumer goods and offer a wider choice of affordable products. They are also involved in helping the EU to draw the right lessons from the financial and economic crisis through better regulation and supervision of financial markets. Administrative costs have been stable for a long time, and over the past five years serious efforts have been made to keep them low. The Commission has conducted a zero growth policy in relation to staff numbers. It has dealt with new competences and priorities through redeployment of existing staff and has asked for no extra staff beyond those resulting from enlargement. The Commission also decided to freeze its administrative expenditure in 2012, a 0% change.

Just seven years ago, the European Commission undertook a major reform of its administration. This included lower recruitment salaries, creation of a contract agent category with lower salaries, higher retirement age, lower pension rights and higher pension contributions. This reform has already saved the EU taxpayer €3 billion, and is expected to generate another € 5 billion in savings by 2020.

4. The EU budget is riddled with fraud.
The European Court of Auditors gives our accounts a clean bill of health and says that they correctly reflect how the EU budget is spent.

It is true that is some policy areas, the Court of Auditors still has a problem to sign off our payments. In cohesion policy for example the error rate is still slightly above 5% though this represents a considerable reduction. The Court estimates the Commission error rate at between 2% to 5% in our payments, depending on the policy area, whereas the threshold set by the Court is a 2% error rate.


A 2% to 5% error rate is not big. It means that a minimum of 95% of our payments are correct. So we are not doing badly at EU level.
Errors don’t mean fraud. Suspected fraud affects only a very small part of the budget, accounting for 0.2% of the EU budget.
Last May, the Commission proposed steps to improve accountability via the review of the financial regulation, by which the Member States’ national paying agencies for regional aid would be required to issue management declarations of assurance on EU funds (as is already the case in agriculture), subject to an independent audit. So far, the reaction from Member States has not been enthusiastic.

5. The EU budget is decided by Eurocrats without any democratic procedures.

The annual EU budget is decided by elected politicians, in the European Parliament and in the Council that brings together the Member States. The Commission only proposes the budget, and has to respect the ceilings set out for a period of time (currently 2007-2013) by these elected politicians.

The Commission proposes the Multiannual Financial Framework. It is then negotiated and adopted according to transparent and democratic procedures, in full respect of national sovereignty and democratic rights.

For expenditure, the decision on the regulation defining the new Multiannual Financial Framework (MFF), which will kick in as of 2014, is taken by the European Council acting unanimously, after obtaining the consent of the European Parliament, given by a majority of its members.

For own resources that finance the budget, the Council must take a unanimous decision after consulting the European Parliament. This decision enters into force only once all Member States have approved it in accordance with their constitutional requirements.

Also for the annual EU budget, EU decision-making follows strict democratic procedures, which are similar to those of most national governments. The initial proposal for the annual budget comes from the Commission. The budget is examined and agreed by the Council and the European Parliament. The final agreement is usually reached in December each year.

Every citizen can follow the process of budgetary negotiation. The documents are on our web sites and detailed discussions in the committees of the European Parliament can be watched online.

6. The EU costs too much.
Simply not true.

A Tax Freedom Day comparison is telling. This is the amount of time during the year that people have to work to pay their total tax burden. In most Member States, citizens have to work well into the spring and summer until they have paid their contribution. In contrast, the average European has to work only four days, until 4 January, to cover his or her contribution to the EU budget.

7. The EU finances silly projects like dog training centres or Elton John concerts.
This is another fallacy conveyed by some.

In both cases, the relevant authorities had to pay back every single cent that they wrongly claimed. Neither cost a euro to the taxpayer.

Generally, the national and regional authorities in Member States select projects which they think are best suited to their needs in line with the strategies and priorities agreed with the Commission. Checks at different levels (project, national, EU) ensure the taxpayers’ money is protected to the best possible extent. If a claim is not legitimate, the EU budget does not fund it.

8. The Commission wants to introduce a direct EU tax and increase the tax burden on citizens.
This is wrong.

The Commission has never floated the idea of a direct EU tax. Member States will remain in control of raising taxes. The Commission is not becoming your taxman. Ideas for new own resources as presented in the budget review are not about extra money for Brussels. It is not about adding to the tax burden of citizens. It is about changing the mix of resources that finance the EU budget. Every euro that is collected under a reformed system reduces the national contributions of Member States and makes the new budget fairer and more transparent.

Did you know that any decision on EU financing requires the unanimous agreement of Member States and subsequent ratification according to their constitutional requirements? Implementing rules require, in addition, the consent of the European Parliament. This means that EU own resources are subject to strong parliamentary control and that Member States’ sovereignty and democratic rights are fully assured.

9. Most of the EU budget goes to farmers.

In 1985, around 70% of the EU budget was spent on agriculture. In 2011, direct aid to farmers and market-related expenditure amount to just 30% of the budget, and rural development spending to 11%. This declining path continues.

Moreover, this relatively large share is entirely justified. Agriculture is the only policy almost entirely funded from the EU budget. That means that European spending replaces to a large extent national spending, which is why it accounts for a substantial proportion of the EU budget. The EU budget pays what national budgets do not pay anymore since there is a Common Agricultural Policy (CAP).

Successive reforms of the Common Agricultural Policy have moved support away from production to direct income support for farmers, provided they respect certain health and environmental standards, and for projects to stimulate economic activity in rural areas. So the CAP is constantly developing.

The EU has also seen the accession of 12 new member states, most of which have large agricultural sectors. But there has been no increase in the CAP budget to cover these additional costs.

10. Because food and commodity prices are high, we can scrap our farm subsidies.
On the contrary.

The rise and fluctuation in food and commodity prices highlights the importance of investing in agriculture in order to better match supply to demand. High prices mean that demand is stronger than supply. Global food demand is predicted to rise by 50% by 2030 as population growth is accompanied by changes in dietary patterns in many emerging economies. The issue therefore is a global one, which underlines the fundamental challenge of food security – and the importance that Europe maintains its agricultural production potential in all areas in order not to become over-dependent on food imports.

Furthermore, since in Europe there is little room for expanding the production area, productivity growth has to come through innovation and research. The EU’s rural development policy can help our farmers embrace new production possibilities and accelerate technology transfer.

11. The Common Agriculture Policy creates food surpluses and hurts farmers in the world’s poorest countries.
The days of ‘wine lakes’ and ‘butter mountains’ are long gone.

We have seen 10 years of reforms to make our agricultural policy more development-friendly. Today, developing countries have excellent market access with low or zero tariffs and market distortions are significantly reduced. Today, around 70% of the EU’s agricultural imports originate from developing countries. Furthermore, export subsidies have been reduced drastically: 15 years ago, we spent €10 billion a year on export subsidies. In 2009, we spent no more than €350 million. In the context of the WTO negotiations, the EU has offered to eliminate all export subsidies by 2013. By 2011, 90% of direct support is non-trade-distorting (not linked to production).

Did you know that the average EU farmer receives less than half of what the average US farmer receives in public support? And did you know that the EU is not only the biggest donor of development aid in the world but also the largest trade partner for Africa? Almost 40% of African exports go to the EU. And the value of EU imports of agricultural products from developing countries is 20% higher than the figures for the USA, Canada, Japan, Australia and New Zealand put together.

12. Cohesion policy is expensive charity.
Cohesion policy helps poorer regions and countries catch up and connect to the Single Market. It is a future-oriented investment policy that clearly benefits the rest of Europe by creating growth and jobs across the board.

For example, intra-EU exports have gone up considerably to regions benefiting from cohesion funds. There is a clear link between cohesion policy and growth in the EU. Studies have shown that GDP in the EU-25 as a whole has been 0.7% higher in 2009 thanks to cohesion policy investments over the 2000-2006 period. This is estimated to rise to 4% by 2020. In the EU-15 alone, the estimate is a cumulative net effect on GDP of 3.3% by 2020. In other words, regional investment is European development. Growth in one poorer region leads to the purchase of goods and services from another, richer region. This boosts the development of the Single Market, which represents between 60% and 80% of Member States’ exports, considerably more than to third countries like China, India or the US.

Cohesion Policy over the 2000-2006 period resulted in a return of €2.1 for each euro invested. By 2020, the return is estimated at €4.2 per euro invested. Cohesion Policy also helped to increase the level of employment. Estimates for 2009 are that the number employed was 5.6 million higher as a result of policy in 2000-2006, or an average of 560,000 more a year than without the Cohesion Policy.

In the aftermath of the recent downturn and debt crisis, cohesion policy has a key role in the economic and social recovery, leveraging investment in growth sectors like energy efficiency. It also helps people train and improve their skills to find a job.

13. The Multiannual Financial Framework is another example of the EU’s path towards a centralised planning economy.
Certainly not.

The Multiannual Financial Framework (MFF) defines the EU’s long-term spending priorities in line with the agreed political priorities and sets annual maximum amounts to be spent on each priority. The financial framework stretches over several years (for example from 2000-2006 and from 2007-2013) to ensure sound and responsible financial planning and management.

With such a multiannual financial framework, annual EU budgets cannot grow out of hand and must focus on real priorities.

The EU budget never runs a deficit, never builds up debt and only spends what it receives. It is always balanced.

A public consultation on common yardsticks for Europe’s environment

Mercredi 29 juin 2011

Improved data sharing in the EU, would allow to arrange a cross border emergency rescue, prevent a major environmental damage or compare energy consumption of buildings in different countries.

With INSPIRE – Infrastructure for Spatial Information in Europe – the European Union is creating a common standard to make environmental information quickly and easily accessible. This will translate into clear benefits for European citizens, ranging from improved emergency services to a healthier everyday environment. Common standards will help to cut costs and improve the basis for decision making at all levels. Views are now being sought on the suitability of the proposed standards (see link below).

Common standards will contribute to improving success rates in cases where access to correct information is essential. This will help prevent unfortunate incidents such as one involving a fire brigade in the South of France, which was delayed due a lack of access to updated and integrated data. INSPIRE will also play an important role in calculating how countries reach EU objectives in reducing energy consumption: today the error margin can be as high as 20%.

Hundreds of experts from across Europe have been working together for several years to agree common definitions in important policy areas such as energy, climate change, biodiversity, the marine environment, and human health. The proposed standards are now open for public consultation and testing to assess their usability across disciplines and nations.

Environment Commissioner Janez Potočnik said: “The INSPIRE standards will help us improve the environment. The more we have a common understanding in Europe of what we talk about, the better we can work together for the benefit of environment. I hope many people will tell us what they think about it.”

Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science, and thus responsible for the Joint Research Centre (JRC) which does the technical coordination of INSPIRE, said: “With material and expertise made available by over 650 public and private organisations and coordinated by the JRC, INSPIRE is a knowledge-base of tremendous potential. Common environmental data standards are crucial not only for policymaking but also for underpinning scientific research and ultimately the deployment of innovative and sustainable technologies”

Common yardsticks for Europe’s environment open for public examination
Data specifications covering 25 themes including land cover, buildings, soil, land-use, energy, health and safety are now open for public consultation until 21 October 2011.

This means that everyone can have a say on standards that will harmonize the EU-wide approach to data about natural risk zones, atmospheric conditions, meteorological geographical features, oceanographic geographical features, sea regions, habitats and biotopes, species distribution, and energy and mineral resources.

Once adopted, the standards will facilitate cross-border integration and analysis of environmental data, modelling, and forecasting activities in many policy areas.

Studies have shown that the benefits of INSPIRE are both economic and social: while allowing faster and less expensive environmental impact assessment, INSPIRE brings improved business opportunities and creates synergies between public administrations.

INSPIRed by 2020
The launch of this consultation coincides with the INSPIRE Conference which takes place in Edinburgh, Scotland, from 27 June to 1 July 2011. This event brings together 700 representatives from governments and the private sector to explore how INSPIRE can contribute to Europe’s 2020 strategic goals under the theme “INSPIRed by 2020 – Contributing to smart, sustainable and inclusive growth.”

The INSPIRE Directive came into force on 15 May 2007 and will be implemented in various stages, with full implementation required by 2019. It aims to create a spatial data infrastructure which enables the sharing of spatial information among public sector organisations and facilitates public access to spatial information across Europe.

Parliament wishes to fight against corruption in sport

Mercredi 29 juin 2011

Considering that the match-fixing and illegal bets kill the spirit of sport, MEPs adopted a written declaration condemning corruption in sport and calling for the EU to act.

This article is only available in French

Improve prices for dairy farmers

Mercredi 29 juin 2011

For MEPs in the Agriculture Committee, the prices must be established more clearly in the distribution chain and dairies will be held accountable each month. They want to achieve fairer prices for dairy farmers.

The new rules would apply only until 30 June 2020, and will be reviewed in 2014 and 2018.

More bargaining power for producers

To correct the imbalance in bargaining power between farmers and dairies, farmers should be able to join producers’ organisations that can negotiate raw milk deliveries for them and ensure that they get a fairer share of the price paid by consumers, inter alia to cover rising production costs, says the committee

To avoid the formation of cartels, the volume of raw milk covered by such negotiations and produced or delivered in any Member State may not exceed 40% of total national production of that state - i.e. 7% more than in the original EC proposal - and 3.5% of the total EU production. However, to prevent serious distortions of competition, a national competition authority or, if the negotiations cover more than one Member States, the European Commission, may decide that the agreement must either be renegotiated or not put into effect.

Compulsory contracts

Under the new regulation, every raw milk delivery from a farmer to a processor would have to be covered by a written contract. If the delivery is made through one or more collectors, it will be up to the Member State concerned to decide which stage should be covered, says an amendment inserted by the committee.

These contracts would have to be concluded before the delivery, and would have to state a milk price fixed for no less than one year, say MEPs. At present, milk prices are often fixed only after delivery, on the basis of the profits made by dairies, which means farmers must sell without knowing how much they will earn, notes the committee.

Monitoring producer prices

Production volumes and average prices paid for raw milk would have to be declared by the first purchaser each month under an amendment approved in committee. MEPs also call for a Market Monitoring Agency to be established to collect and disseminate various production and supply data in order to give early warning of possible future milk market imbalances.

Origin rules

To improve the working of the market for dairy products registered under a protected designation of origin (PDO) or protected geographical indication (PGI), the committee proposed a supply management system, which Member States may establish provided that it will in no way harm competition on the single market or lead to small producers being adversely affected.

Other measures

MEPs, concerned that these new rules may not suffice to overcome all the difficulties facing dairy farmers, and especially those with small herds or in remote areas, called on the Commission to table further measures for dairy farmers in its legislative proposal, due in late autumn 2011, for the Common Agricultural Policy (CAP) reform. The report, drafted by James Nicholson (ECR, UK), was approved with 34 votes to 3.

Next steps

The report will be put to a vote by Parliament as a whole by the end of the year. MEPs will in the meantime launch an informal three-way talks with the Commission and the Council with a view to reaching a first-reading agreement before the plenary vote takes place.

Consumer price levels in 2010 Price levels varied by one to three across the EU27 Member States

Mercredi 29 juin 2011

STAT/11/95 28 June 2011 In 2010, price levels for consumer goods and services1 differed widely across Member States. Denmark (143% of the EU27 average) had the highest price level, followed by Finland (123%)….

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In the opinion of Advocate General Sharpston, passengers may claim reimbursement of reasonable expenditure incurred where an airline fails to provide care and assistance in the event of a cancelled flight

Mercredi 29 juin 2011

Press and Information Court of Justice of the European Union PRESS RELEASE No 64/11 Luxembourg, 28 June 2011 Advocate General’s Opinion in Case C-83/10 Sousa Rodriguez and others v Air France That compensation may not be offset by the compensation to …

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Remarks by President Van Rompuy following the first session of the European Council

Mercredi 29 juin 2011

EUROPEAN COUNCIL THE PRESIDENT EN Brussels, 23 June 2011 EUCO 28/11 PRESSE 200 PR PCE 4 Tonight we focussed on the economy. Our discussions fell into three parts: • Firstly, economic policy coordination, with the work done in the European Semester and …

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Brussels, 24 June 2011 Remarks by President Herman Van Rompuy on the occasion of the political agreement on the accession of Croatia

Mercredi 29 juin 2011

EUROPEAN COUNCIL THE PRESIDENT EN Brussels, 24 June 2011 EUCO 31/11 PRESSE 203 PR PCE 6 Remarks by President Herman Van Rompuy on the occasion of the political agreement on the accession of Croatia We are pleased to welcome Prime Minister Jadranka Kosor …

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Brussels, 24 June 2011 European Council appoints Mario Draghi President of the European Central Bank

Mercredi 29 juin 2011

EUROPEAN COUNCIL EN Brussels, 24 June 2011 EUCO 30/11 PRESSE 202 CO EUR 15 European Council appoints Mario Draghi President of the European Central Bank The European Council today adopted a decision appointing Mario Draghi (Italy) President of the European …

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Brussels, 24 June 2011 Remarks by President Van Rompuy following the final press conference of the European Council

Mercredi 29 juin 2011

EUROPEAN COUNCIL THE PRESIDENT EN Brussels, 24 June 2011 EUCO 29/11 PRESSE 201 PR PCE 5 Remarks by President Van Rompuy following the final press conference of the European Council This morning, after yesterday’s economic discussion, we focussed our debate …

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