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EU sets budget perspective until 2020: subject to agreement of MEPs

On Friday 8th February, European heads of state and government reached a deal on the EU budget for the period 2014-20. The total budget of €960bn (€908bn in actual payment obligations) represents a 3% reduction from the last 7 year deal and is the first time in EU’s history there has been a real-term cut in budget. The deal is yet to be finalised with the parliament stating in a joint press release “the European Parliament cannot accept today's deal in the European Council as it is”. There is good news for the environment with the European Commission’s pledge to spend 20% of the entire budget on climate-related action standing, yet associated funding has been cut.  Furthermore, of the €373.179 billion for sustainable growth and natural resources, €362.79 billion has been allocated to the CAP and rural development, leaving €10.39 billion to be shared between the CFP and LIFE. The LIFE fund for the environment and climate projects was due to receive €3.6 billion and replace the current LIFE+ program but with the Sustainable Growth: Natural Resources, which fund the LIFE programme, being cut, it looks as any proposed funding increase will not occur. The Ecofin Council will decide on exact funding amounts but the IEEP suggest LIFE looks as if it may suffer a cut of around a quarter. In addition all EU institutions must reduce their staff levels by 5% over five years.  The CAP will have it’s direct payments cut but a level of flexibility has been introduced with 15% of both rural development funding, and direct payments, available to be transferred between the two, with an extra 10% of rural development funds available to be transferred to direct payments if a countries direct payments per hectare fall below 90% of the EU average (bringing the total to 25%). The greening of the CAP remains with 30% of the annual national ceiling reserved to fund the initiatives, yet it still leaves 70% of the aid available to those who practice non-sustainable agricultural practices. The energy, transport and digital networks had their budget cut from €50bn to €41bn, including a drop in funding for electricity grid projects from €9.1bn to €5.1bn. The likely effect is the €5.1bn of EU funding will be insufficient to attract the €200bn in private finance originally envisioned for grid transmission projects. Philip Lowe, EU energy civil servant, has said that cuts to the energy infrastructure package in the EU's new budget will increase costs and delays to the European Commission’s plans for a low carbon economy by 2050. Connie Hedegaard called the budget “a major step forward for our efforts to handle the climate crisis” while Tony Long, Director of the WWF European Policy Office stated that the “WWF is shocked to see that Member States have protected the discredited CAP direct payments from the bulk of cuts… The proposed ‘greening’ of direct payments is so far a shameful smokescreen. It will certainly backfire on the reputation of the EU budget as a whole, undermining the European project.” READ MORE

Issue 20