EU Agrees on Reduced Budget 2007-2013

Politics » BULGARIA IN EU | April 5, 2006, Wednesday // 00:00

The European Union has edged closer to a seven-year budget agreement after MEPs backed down from insisting an EUR 11.4 B increase.

The accord, covering the period 2007-2013 increases spending slightly from the figure of just over EUR 862 B agreed by EU leaders in December last year.

The decision breaks a four-month deadlock, after the parliament had been holding out on giving the green light to the seven-year package.


MEPs who can veto the EU budget but are not directly involved in structuring it, has demanded a substantial increase in funding for areas such as education, research and trans-European energy, telecommunications and transport networks, and enlargement.

After talks lasting more than seven hours, late on Tuesday Austrian Finance Minister Karl-Heinz Grasser, representing EU governments, agreed o add an extra EUR 2 B to the EUR 830 B financial framework for 2007-2013.

As part of the deal, the EU will also boost its emergency reserve, such as EUR 1.4 B funds used to cope with floods and other emergency situations. It will also add EUR 487 M for pensions of EU civil servants and other administrative matters.

Details of the new package will be presented to the European Parliament on Wednesday by Austrian Chancellor Wolfgang Schuessel, whose country holds the rotating EU presidency, and EU Parliament President Josep Borrell.

The new draft has still to be approved by the 732-member assembly. A quick deal is crucial for the EU25 to be able to start planning EU-funded projects for next year. The budget is likely to be put forward for a vote in May.

The seven-year budget is the first that covers EU's 10 newcomers, which joined in 2004.

EU leaders have agreed to a mid-term review of the budget in 2008 or 2009, which could lead to cuts in the EU's agricultural subsidies, releasing money for other areas that would boost its competitiveness. The parliament will also be consulted on the review.

The EU governments have also agreed to demands by the MEPs to declare at the end of every budget year that EU funds have been spent properly. The proposal was welcomed by the EU's top auditing watchdog, which has withheld approval for the EU budget for 11 years.

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