A budget for Europe (2014-2020)

The European Commission presents a proposed budget for the period 2014-2020, aimed at contributing to smart, sustainable and inclusive growth. The proposed measures should enable the financing of the Europe 2020 strategy objectives and the eventual implementation of a truly European budget.

ACT

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 29 June 2011 - A Budget for Europe 2020 [COM(2011) 500 final – Not published in the Official Journal].

SUMMARY

This Communication details the future European Union budget for the period 2014-2020 and forms part of the Europe 2020 strategy. The proposed budget shall:

• fund common policies, such as the Common Agricultural Policy (CAP);
• assist the weakest regions by applying the principle of solidarity;
• complete the internal market;
• promote synergies, cooperation and large-scale projects in the fields of research, innovation and justice;
• respond to existing and emerging challenges that call for a pan-European approach, such as climate change, demographic change and humanitarian disasters.

A budget for research, innovation and technological development

The EU must be competitive in terms of innovation if it wishes to play a leading role on the world stage. However, it lags behind significantly in terms of innovation and research. In order to catch up, the Commission intends to increase the level of European investment in research and development and bring it to 3 % of GDP.

To this end, the Commission plans to allocate EUR 80 billion for the period 2014-2020 to the Common Strategic Framework for Research and Innovation, complemented by the structural funds.

A budget for solidarity for sustainable growth and employment

The EU’s cohesion policy is an expression of solidarity with the most deprived regions. Cohesion policy also plays a significant role in achieving the ambitions and objectives of the Europe 2020 strategy across the EU. The Commission therefore plans to create a new category of region, namely ‘transition regions’, which would include all regions with a GDP per capita between 75 % and 90 % of the EU-27 average.

Furthermore, unemployment and poverty require coordination of national and European actions. For this reason, the European Social Fund (ESF) has a significant role to play. Its activities could be complemented by the PROGRESS programme and the EURES network.

The Commission intends to allocate EUR 376 billion to the cohesion policy instruments and to distribute this amount between the different areas as follows:

• EUR 162.6 billion for convergence regions;
• EUR 38.9 billion for transition regions;
• EUR 53.1 billion for competitiveness regions;
• EUR 11.7 billion for territorial cooperation;
• EUR 68.7 billion for the Cohesion Fund.

A budget for connecting Europe

In order to be fully operational, the single market requires modern infrastructure. For this reason, the Commission proposes the creation of a Connecting Europe Facility in order to promote access to the internal market for all.

The Commission will dedicate EUR 40 billion to the creation of the Connecting Europe Facility, along with EUR 10 billion for investment in transport within the Cohesion Fund. This amount will be divided between three different sectors:

• EUR 9.1 billion for energy;
• EUR 31.6 billion for transport;
• EUR 9.1 billion for ICT.

A budget for the Common Agricultural Policy

The CAP must be competitive, ensure an adequate and secure food supply, and preserve the environment and the countryside while providing a fair standard of living for the agricultural community. To achieve these objectives, the Commission wishes to proceed with some changes in order to integrate the CAP into the Europe 2020 strategy. In the future, the budget allocated to agriculture will also support the sustainable management of natural resources and tackling climate change, and will contribute to balanced territorial development throughout Europe.

The Commission intends to keep the two-pillar structure of the CAP with a greener and more equitably distributed first pillar and a second pillar that is more focussed on competitiveness and innovation, climate change and the environment. It intends to introduce the following changes:

• greening of direct payments;
• convergence of payments;
• capping the level of direct payments.

The Commission proposes to allocate:

• EUR 281.8 billion to the first pillar of the CAP;
• EUR 89.9 billion to rural development.

In addition, an amount of EUR 15.2 billion will be distributed between the following sectors:

• EUR 4.5 billion for research and innovation;
• EUR 2.2 billion for food safety;
• EUR 2.5 billion for food support;
• EUR 3.5 billion in a new reserve for possible crises in the agricultural sector;
• up to EUR 2.5 billion for the European Globalisation Fund.

A budget for investing in human resources

The 2020 strategy highlights the need to increase tertiary education in Europe and to reduce early-school leaving, while valuing culture and media activities.

However, the current architecture of the programmes which aim to achieve these objectives is still too fragmented. For this reason, the Commission proposes to establish a single programme on education, training and youth.

To this end, the Commission wishes to allocate EUR 15.2 billion to education and training, along with EUR 1.6 billion for culture. This funding should be complemented by the structural funds.

A budget for responding to the challenges of immigration

Policies relating to security and immigration issues are at the heart of European concerns. Significant changes on how to conduct these policies were introduced under the Lisbon Treaty. For this reason, the Commission wishes to henceforth simplify the structure of the expenditure instruments by reducing the number of programmes to two Funds:

• a Migration and Asylum Fund;
• an Internal Security Fund.

Furthermore, the Commission intends to allocate EUR 8.2 billion to home affairs, and EUR 455 billion to civil protection and the European Emergency Response Capacity.

A budget for making the EU a global player

It is important that the EU plays a leading role on the world stage, and that it ensures stability, prosperity and democracy in the countries surrounding it. In particular, the Commission wishes to develop its external strategy by creating a pan-African instrument under the Development and Cooperation Instrument (DCI). The EU also wishes to be involved in the process of democratisation in the Arab world.

The Commission does not consider that another major alteration of the legislative architecture applicable to the management of its external relations is necessary. It proposes to allocate EUR 70 billion for the external assistance instrument for the period 2014-2020.

And outside the MFF:

• European Development Fund (ACP countries): EUR 30 billion;
• European Development Fund (overseas countries and territories): EUR 321 billion;
• Global Climate and Biodiversity Fund;
• Emergency Aid Reserve: EUR 2.5 billion.

Projects requiring funding outside the EU budget

The European Development Fund (EDF) is financed outside the EU budget because of its specific status. The same applies to the ITER and European Earth Monitoring programme (GMES) projects, for which the costs are too high to be included in the EU budget.

A simplified budget

The new budget framework of the EU must meet the need for simplicity. For this reason, the Commission has decided to reduce the number of separate programmes and instruments. Complex programmes which have not been successful will either be redesigned in a simplified and more effective form or discontinued.

Another way to simplify the management of programmes is to put them under a single framework with common rules, keeping any exceptions or specificities to the minimum. For example, the three main sources of funding for research and innovation will be brought together within a single Common Strategic Framework for Research and Innovation. For funds under shared management, a Common Strategic Framework will replace the current approach of establishing separate sets of strategic guidelines for the different instruments.

Executive agencies are called upon to play a greater role in providing better quality service delivery.

Mindful of the pressures on Member States' budgets and having regard to cut backs in national public administrative expenditure, the Commission proposes a 5 % reduction in the staffing levels of each institution/service, agency or other body.

The Commission also proposes to change the five instruments outside the financial framework, specifically:

• the Emergency Aid Reserve;
• the Flexibility Instrument;
• the Solidarity Fund;
• the Globalisation Adjustment Fund;
• a new instrument to react to crisis situations in agriculture.

Conclusion

The Commission proposes in accompanying legislative texts a Regulation adopting a new multiannual financial framework, an inter-institutional agreement on budgetary matters and sound financial management, and for a Decision on own resources (with relevant implementing legislation).

In the months to come before the end of 2011, the approach outlined in this Communication will be set out in detail in the legislative proposals for the expenditure programmes and instruments in the individual policy areas.

RELATED ACTS

Proposal for a Council Regulation of 29 June 2011 laying down the multiannual financial framework for the years 2014-2020 [COM(2011) 398 final – Not published in the Official Journal].

Proposal for a Council Decision of 29 June 2011 on the system of own resources of the European Union [COM(2011) 510 final – Not published in the Official Journal].

Last updated: 03.10.2011