EC Adopts 2015 EU Draft Budget Focusing on Economic Growth

The European Commission has introduced the 2015 draft budget, Wednesday, which foresees EUR 142.1B for payments or nearly EUR 6B more compared to 2014 EU budget.

The bulk of the commitments is for future projects that make Europe stronger economically whereas some 40% of the payments still cover EU funded projects from the 2007-2013 financial period, the official EC press release said. Also the Commission is proposing a further 1% reduction in its staff numbers, the third such cut in three years.

"The EU budget is 28 countries pooling together a small part of their resources to the greatest benefit of more than 500 million Europeans, the EU budget Commissioner Janusz Lewandowski said.

"It helps avoid duplications of efforts at the national level and makes each of our member states stronger as combined efforts bring better results than fragmented action. The 2015 draft budget amounts to 1% of combined GNI of all Member States and manages to take into account present and future major issues such as the Ukrainian crisis or the need to strengthen the EU's energy security by refocusing its scarce resources."

The proposed increase of 2.1% in commitments and 1.4% in payments is virtually absorbed by the estimated inflation rate for 2015.

Commitment appropriations focus on the new programs (2014-2020 MFF) and almost 60% of the proposed amount is dedicated to programs that support Europe's research and innovation, youth and businesses.

The lion's share of payment appropriations goes to areas that boost Europe's economic growth and jobs, such as research, trans-European networks for energy, transport and ICT (Connecting Europe Facility) or the Youth Employment Initiative.

Other areas that see an increase in payments are the asylum, migration and integration fund (+140%) and protecting Europeans' health and consumers (+20%).

The functioning cost of the EU remains stable at around 4.8% of the total budget. Its increase (+1.6%) is around the expected rate of inflation, therefore it does not increase in real terms. The draft budget also includes the third 1% staff reduction in three years. Finally, the Commission cut the expenditure and staffing requests of other EU institutions to better align them with the staff reduction target of 5% over 5 years and apply restraint to other administrative costs.

Following the adoption by the EC of the 2015 draft budget, the Council (Member States) will adopt its position on it, followed by the European Parliament. This will be followed by a 21-day conciliation period to find a compromise agreement between the Council and the Parliament.

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