Budget: It’s not just about 2012

The 2012 Budget battle would not be funny if it was just about next year. To make things more complex, the next Multi-annual Financial Framework (MFF for short) will be negotiated.

The MFF defines what the budget will look like for the next 7 years (the current one runs from 2007 to 2013, the next will be 2013-2020). The expenses and incomes of the Union are organized. Sure, the EU budget is re negotiated every year (and boy do we now that) but the negotiations are held within the frame of the MFF (thanks captain obvious).

The European Commission just put forward its proposal for the next MFF, and as one would expect, it sparked a lot of debate[*,*,*,*,*,*]. Let’s review what’s in the proposal.

  • The next MFF would come with a small increase : just +4.8% in respect to the 07-13 one, staying around 1 trillions Euros (about 286 euros per citizen and per year).
  • The contribution of member states will be reduced, this reduction would be financed by the next item of the list :
  • Implementation of new resources : A tax on financial transactions (Tobin tax) and a direct VAT intake (current VAT resources for the EU are indirectly collected).
  • The CAP would be freeze in number – the amount would be fixed, which means the budget for the PAC would not follow inflation and effectively be reduced over time.
  • The rebate agreed for the UK would be discontinued. Other rebates are set to expire at the end of the current MFF.
  • Some items are being put off the sheets for separate projects like the ITER research facility. Those account for an additional 58 billions euros.
  • The number given by the Commission are broken down into categories, making the comparison with previous MFF more difficult.
MEPs will debate over the proposition next week during the last plenary session before summer recess. The MFF proposal will be discussed, debates, negotiated over the next year and have to be agreed upon before the end of 2012.
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