On 7-8 February, the national leaders of the EU Member States stroke a political agreement on the global EU budget for 2014-2020. The national leaders propose a global budget of €910bn in payments and €960 billion in commitments (equivalent of 0,95% of EU Gross National Income), which is €12 billion less than Van Rompuy’s proposal in November 2012,, and much less than the European Commission’s initial proposal of €1.033bn. The proposed amount represents a lower percentage of the EU GNI than the current budget for 2007-2013. It is the first time in EU history that Member State leaders agree on a lower budget compared to the previous budgetary period.
In the Council proposal, the global amount for Heading 3, which includes funding for culture, rights, security, citizenship initiatives and consumer protection, has been increased in relation to the 2007-13 EU budget, which is an achievement, but reduced by 15% compared to the initial EC proposal.
In the Council proposal, the Cohesion funds, which represent the second largest part of the EU budget, have been cut from the current €355 billion to €325bn whereas the EC had originally proposed €376bn.
Following the EU Summit and Council agreement, CAE reacted with a campaign statement calling on the Members of the European Parliament to stand strong in the budget negotiations.
It is still too early to assess the impact of the Council proposal on the ‘Creative Europe’ programme. If confirmed, the cut of about 2.84 billion (compared to the EC proposal) to Heading 3 may lead to different outcomes depending on how it will be spread over the different policies financed under the heading. Nothing is guaranteed yet.
It is an extremely sensitive moment and any possible pressure to ensure that an appropriate budget is provided to the ‘Creative Europe’ programme should be exercised, by addressing President Barroso, Van Rompuy and Schulz, Commissioner Vassiliou, the Chair of the Culture committee Mrs Pack, the Vice-chair of the Culture committee Mrs Trüpel, the EP rapporteur Mrs Costa and the shadow rapporteurs Mr Cavada, Mrs Schaake, Mr Migalski and Mr Bisky.
The European Parliament will now have to react to the Council proposal. It is important to know that the EP can‘t introduce changes to the proposal once it has been formally adopted by the Council. Once adopted, the EP can either reject or approve, but also adopt recommendations, including recommendations on the allocation of budgets within the different headings. The EP President, Martin Schulz (S&D – Germany) who already warned that the majority of MEPs would vote no to a budget which is smaller than the EC proposal, reacted in a negative way to the Council proposal: “€910 billion (in payments) is certainly not acceptable for the Parliament,” Schulz said to the European Voice.
Indeed, one of the arguments of the Parliament to reject the proposal is that the final agreement of the Council sets the figure for “commitments” – the maximum amount of money allocated during the seven-year period – to €960bn, while the budget for “payments” – the amount of money that can actually be spent – has been reduced substantially by €34bn to €908.4bn. Even if the gap in percentage-terms is similar to the existing gap between commitments and payments in the current period, evidence from the 2013 EU budget has proven that such a gap may lead to a deficit. According to Mr Schulz, again quoted in the European Voice, “With the proposal as it is on the table now, the European Union is on the way to a deficit union.”
Given the current situation, MEPs may decide to take a strong position by focusing on their core demands of added flexibility in shifting unspent funds between headings and budget years and the demand to introduce a legally binding right for the next EP to revise the multi-annual EU budget. They are also expected to make another bid for lowering the EU’s dependence on Member States’ contributions by strengthening the EU’s ‘own resources’, notably by continuing to demand the introduction of a tax on financial transactions.
Martin Schulz has also declared that the EP vote on the budget that will take place on March 13th is likely to be secret in order to avoid any pressure from Member States on their national MEPs.
 The figures are given in 2011 prices (the year in which the EC published its proposal for the next budget cycle) rather than current prices. Since the EU budget is automatically adjusted with a 2% inflation-rate each year, the €960bn commitment ceiling for the next multi-annual budget will have risen to €1,019bn by the time the next budget cycle starts in 2014.
 The Growth national income (GNI) is a criterion used to measure a country’s wealth. It consists of: private consumption expenditure, gross private investment, government consumption expenditures, net income from assets abroad (net income receipts), and the gross exports of goods and services, after deducting two components: the gross imports of goods and services, and the indirect business taxes. In the Council conclusions, the calculation of the ceilings of the MFF table for the period 2014-2020 as a percentage of EU-28 GNI is the result of most recent macro-economic forecasts and projections made by the EC.