ECOFIN (18 November 2011)

Thursday 24th November 2011 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The Economic and Financial Affairs Council—Budget was held in Brussels on 18 November 2011.

The following items were discussed:

Preparation of the Conciliation Committee meeting with the European Parliaments

The Council reached a final position on the 2012 EU budget, as part of negotiations with the European Parliament via a concurrent Conciliation Committee meeting. In particular, it was agreed that EU spending (payment appropriations) in 2012 should total €129.1 billion, some €4.0 billion below the level advocated by the European Parliament. The level of commitment appropriations, which limits the value of new contractual obligations to disburse EU funds in current or future years, was set at €147.2 billion for 2012.

As part of this process, the Council also adopted the Letter of Amendment No. 2 to the Preliminary Draft Budget for 2012, which handles mainly administrative costs relating to the expected accession of Croatia to the EU, and the Letter of Amendment No. 3 to the Preliminary Draft Budget for 2012, which concerns updates for estimated needs for agricultural expenditure and international fisheries agreements.

Separately, the Council agreed to adopt Draft Amending Budget No. 6 to the General Budget 2011, which increases the level of EU funds by €200 million in 2011 in order to reflect the possibility of overspending on some programmes during the remainder of this year.

Outcome of the Conciliation Committee meeting with the European Parliaments

The Government supported the Council’s overall position on the 2012 EU budget, which delivers on the Government’s principal aim to freeze EU spending in real terms next year. This outcome delivers real budgetary restraint at EU-level, supports ongoing efforts to consolidate public finances across many member states and respects the principles of sound financial management. It also delivers on the Prime Minister’s letter from December last year, signed jointly by France, Germany, Finland and the Netherlands, that called on the Council to step up progressively its efforts to curb annual growth in EU spending.

In the Government’s view, the Commission did not present satisfactory forecasts to demonstrate that extra funds requested under Draft Amending Budget No. 6 to the General Budget 2011 were necessary. Unfortunately, this is another example of poor EU budgeting. This Government are committed to improving financial management in the EU, as well as delivering budgetary restraint. Therefore, the Government voted against this in-year adjustment, in order to signal its ongoing dissatisfaction with EU financial management.

Any other business

No substantive issues were raised under this agenda item.