EU leaders agreed to spend €960 billion for the 7 years from 2014 through 2020, a cut of 3.4% from the current spending period. It leaves the 2020 level of spending approximately the same as 2010. Divisions in the Council ran deep during the negotiations between net recipients and net contributors. EU Member States receiving agriculture subsidies and/or development funds tried not to see subsides substantially reduced.

With states defending the budget areas in which their countries received the most funds, there was no voice in the Council to defend the common part of the EU budget that funds health, social inclusion, fundamental rights, development aid, research, and the environment.

Many civil society organisations fear the agreement reached will do very little to help member states face challenges like growing inequalities, persisting poverty levels within Europe and beyond, increasing unemployment rates, expanding ratios of obesity and non-communicable diseases, population ageing, and the transition towards a low-carbon economy

Budget cuts in figures

- Heading 3 – “Security and citizenship” is cut to €15.7 billion, compared to € 18 8 billion in the Commission proposal.

- Heading 4 “Global Europe” suffers a cut, from €70. billion to €58.767 billion.

- “Administration” all EU institutions undertake to reduce their staff by 5% over five years.

- Horizon 2020 (the research programme), would get €70.96 billion, according to calculations by Michael Jennings, spokesperson for Maire Geoghegan-Quinn, Commissioner for Research, Innovation, and Science, the proposed €80 billion would have been a 60% increase in the current funding programme.

- The €40 billion earmarked for the Connecting Europe facility, (transport, energy and digital networks) has been cut to €29.3bn

Some of the budget areas, such as citizenship and external action would be frozen at current spending levels. Under the deal, the yearly funding of these two sections would be lower than the current annual budget until the year 2016.

In the case of the part of the funding aimed at citizenship and internal policies, the budget line received a 15% cut. In the Health for Growth Programme a 15% cut to the proposed €446 million would mean a greater reduction than one year of funds and operations (66 billion) as research funding has increased year on year in the current period, 2013 to roughly €11 billion. That means that €70 billion over 7 years would be a decrease from current spending.

In the area of social funding, there were some positive outcomes. A Youth Employment Initiative receives €6 billion, half from the European Social Fund, and half from a dedicated Youth Employment Budget. The food aid scheme for most deprived people has been put on a sustainable basis and will be allocated €2.5 billion.

Before the Summit ended, the leaders of the four largest political groups in the European Parliament stated in a press release that “the European Parliament cannot accept today’s deal in the European Council as it is”. However, it has not been decided if MEPs will chose to veto the budget as agreed by EU Leaders by secret vote, which alleviates pressures on MEPs from national governments to accept the deal.”

The Irish Presidency will enter in dialogue with the European Parliament on a number of subjects, including flexibility of spending.

Civil society reactions

Reacting to the conclusion of the European Council on the EU long-term budget, Natalia Alonso, Head of Oxfam’s EU Office, said that the “ freezing of the EU’s anti-poverty aid is a breach of faith. The promise to give 0.7 per cent of national income by 2015 to the poorest is off track. EU leaders, like all other countries, should be held accountable for their commitments.”

The IOGT, a worldwide community of non-governmental organisations, reckoned that “the current costs of alcohol harm would amount to in the new EU budget period from 2014 to 2020. If nothing is done to reduce the overall alcohol use in Europe to cut down the costs of alcohol harm, related expenses could reach a staggering €1092 billion.”

Tony Long, Director of the World Wildlife Fund (WWF) European Policy Office reacted to the Council agreement as follows: Leaders have played into the hands of the European Parliament Agriculture and Rural Development committee and conservative agrifoods lobby who are seeking a no strings attached budget that would allow them to keep throwing money at intensive farming and agri-food business that are harming the environment. The proposed ‘greening’ of direct payments is so far a shameful smokescreen. It will certainly backfire on the reputation of the EU budget as a whole, undermining the European project.”

On his side, Peter Matjašič, president of the European Youth Forum. issued the following statement: "At the moment the EU invests directly in education and youth issues only 0.8% of its budget. This is definitely not enough, especially now when youth unemployment rate is 23.4% across the 27 member states! If we don’t act now, the future of young people will be plagued by uncertainty while agriculture will continue to receive more support from the EU joint budget than the generation that is supposed to carry the heavy load of today’s decisions tomorrow."

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Last modified on March 1 2013.