The economic situation of the European Union faces massive changes and the relevant factor is that the budget, either next year’s budget or next programming period budget, is an austerity budget, a situation caused by the countries’ struggle with the distressed global economic conditions. EU financed projects are on the agenda, but the funds granted are much reduced compared to initial estimates.
At the end of July, the Council adopted the draft EU budget for 2013 and the ministries agreed that payment increase should not exceed 2.79% compared to 2012. The proposed growth as regards the level of payments of 6.8% for 2013 comes mainly from legal obligations. Most of these payments are necessary for the areas with the highest potential for stimulating economic growth and competitiveness, but “in 2013, the <<actual>> growth would seem much reduced if payment credits for 2012 had been set according to the actual needs from the very beginning. After all, the budget meets a very important role in stabilizing the economies and for the investments from a series of member states and ignoring this will have negative consequences”, said EC President, Jose Manuel Barroso.
Therefore, reducing payment levels by EUR 5.2 Billion (according to the Council’s proposal) would have serious consequences on the economic recovery affecting the already troubled economies in the region, the research sector and the SMEs.
The draft budget for 2013 is focused on economic growth and jobs. However, these objectives could only be achieved through financial consolidation and economic long-term investments. Therefore, EUR 62.5 Billion are granted to payments for an economic growth that would favour the creation of jobs. EUR 9 Billion (28.1% more than in 2012) will go to the development of framework research programmes , EUR 546.4 Million (+47.8%) will go to Competitiveness and Innovation Programme, EUR 49 Billion (+11.7%) to structural and cohesion funds, EUR 1.2 Billion (+15.8%) to lifelong learning.
The proposed draft budget for 2013 also includes EUR 138 Billion for costs, up by EUR 9 Billion (6.8%) compared to 2012, this proposal being supported by 17 of the 27 member states.
When drafting the budget, member states proposed a 15% cut in research-dedicated costs, which contradicts the official decisions adopted during EU summits: after reaching an agreement on the Stability and Growth Pact at the end of June, the EU leaders committed to include an additional budget of EUR 55 Billion to back research, innovation and economic growth. “A week after the summit, the member states’ officials adopted an opposite position”, Alain Lamassoure, Chair of the Budgets Committee. Research costs will be reduced by 15%, the financial support granted to SMEs by 28% and funds for the cohesion policy, essential especially for economically troubled countries, by EUR 1.6 Billion. Billion euros cuts will trigger major changes in setting the investment priorities in EU member states and whether this becomes a fact or not, we will find out in October, when the final budget will be approved.
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