Wednesday, 12 December 2012

EU's admin costs to rise in 2013 to €8.4bn

Voting in Strasbourg today, MEPs have approved a €132.8bn (£107.2bn) EU budget for 2013.

The 2013 budget includes a 1.85% increase in the EU's admin costs from €8.3bn (£6.7bn) to €8.43bn (£6.83bn), at a time when member states on the other hand are making cuts to public services and national administration costs.

EU administration costs amounted to 5.6% of the EU budget in 2012, at €8.3bn (£6.7bn). This will rise to 6.35% in the 2013 budget
, showing that the EU's running costs - such as pay and perks for EU staff, plus the cost of buildings and facilities - are growing as a proportion of the overall budget, despite Europe's financial difficulties.

The deal also includes an extra €6bn (£4.86bn) added to the 2012 budget to cover a shortfall in the EU's funding for this year. This is less than the €9bn (£7.29bn) the Commission was demanding, likely resulting in a further request for additional funding being made by the EU as early as September 2013.

The addition of this extra €6bn to the 2012 budget gives the appearance that EU spending in 2013 will fall in comparison. But this does not take into account extra requests for funding predicted by the Commission later next year.

This process of annual and subsequent amending budgets to make up funding shortfalls is making the patterns of the EU's actual spending more and more opaque.

EU Ministers must still formally approve the deal, but difficulties are not foreseen since the EU's annual budgets are agreed by majority vote. Member governments demanding a budget freeze or cuts are likely to be over-ruled by the majority (17) of net beneficiaries.

David Cameron is therefore powerless to stop Britain's payments to the EU rising in 2013 and must now focus on the 2014-2020 budget framework negotiations in a bid to stem our liability to fund the EU's ever-increasing demands for public money.

A new meeting of the European Council - comprising the heads of state and government of EU member countries - is expected in early February to try to hammer out a deal on the EU's spending framework from 2014-2020.

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