Europe

Europe

European Parliament pleased with mid-term spending proposal

01 July 2011 01:03 (UTC +04:00)

Baku-APA. The European Parliament Thursday expressed its satisfaction with the European Commission’s spending proposal for 2014-2020 presented on Wednesday night, APA reports quoting Xinhua.

Under the Commission’s proposal, the European Union (EU) budget for 2014-2020 will rise to around 1,025 billion euros (1,486 billion U.S. dollars) in commitments, an increase of 5 percent over the previous multiannual financial framework (MFF) for 2007-2013.

"The proposal of the Commission is responding to what the Parliament has requested in our proposals: we are very pleased of that because it doesn’t happen often in European politics," Guy Verhofstadt, Chair of the Alliance of Liberals and Democrats for Europe (ALDE) Party, told a press conference.

The Commission proposes to establish new own resources, one of the main novelties in this MFF. The plan is to introduce by 2018 two key elements that will transform the EU budget from one based on national contributions to one based on own resources: VAT of one percent and a Financial Transaction Tax (FTT).

"At the moment, 80 percent of the budget depends on national contributions and only 20 percent on own resources. The changes will bring this figure up to 60 percent," Verhofstadt said.

Own resources create a direct link between direct investment from the citizens and the EU, as separate from national contributions. "In order to finance Europe 2020, the budget has to focus more on issues of income," said French MEP Alain Lamassoure.

Another big novelty is represented by an increased flexibility of the budget, which will allow non-spent money to return to the member states, Verhofstadt said.

The 2014-2020 MFF proposal increases expenditures in three key sectors: plus 68 percent on education and culture, plus 46 percent on research and development and plus 297 percent on infrastructure and technology, covering transports, energy and so on, according to Verhofstadt.

The current financial framework, which covers the period of 2007-2013, allocates the lion’s share of the EU budget to sustainable growth, which accounts for 44.6 percent, followed closely by preservation and management of natural resources, with 42.5 percent.

"We are in fact very pleased with the proposal of the Commission. This time it has had the courage to present a coherent, radical, ambitious proposal for the period 2014-2020," Verhofstadt pointed out.

Lamassoure said the next challenge will be reaching unanimity among the member states on the Commission proposal.

Despite satisfaction of the MEPs, the Commission’s proposal is very likely to be frowned upon by some EU member states led by Britian and Germany. They have asked at the end of last year to freeze spending increase in the next MFF at 2013 levels.

And there is also a lack of consensus on the Financial Transaction Tax, which some member states argue will leave the EU in a disadvantaged position in the financial sector.