Chapter News, News

Budget focuses on getting Europe back to growth

The draft 2013 budget amounts to about €138bn in payments, 6.8% more than in 2012. The increase is in line with calls by EU governments for more growth-friendly investment.

The Commission proposes to concentrate spending on areas most likely to encourage growth and lead to more jobs.

More money will be put into research, education, training, energy and transport networks, and improving the EU’s competitiveness, for example. The increase also reflects the additional sums needed for ongoing programmes.

The bills for many of these are due in 2013 – the bridges, railways, motorways that interconnect Europe and increase its competitiveness, for example. EU governments signed off on these commitments in previous budgets and the Commission is legally obliged to pay for them.

However, future expenditure for such long-term projects will be frozen in line with inflation. This means EU governments will not have to pay higher amounts into future budgets.

The Commission is also seeking savings when possible, cutting underperforming programmes and reducing EU staff by 1%, for instance.

Much of the 2013 budget will feed into programmes that directly help people. For example, more money is proposed for a fund which makes it easier for the unemployed or those at risk of losing their jobs to get credit to start their own businesses.

How the budget works

The budget focuses on the needs of Europeans as a whole. We all benefit from this pooling of money in areas where working together makes sense. Instead of duplicating efforts it is much cheaper and more effective for governments to respond to today’s challenges with a co-ordinated effort rather than 27 separate ones.

For example, new EU bodies were set up last year to help governments better regulate their financial services sectors. More energy inter-connections between countries will help provide energy security for Europe and keep costs for people as low as possible.

Some 94% of the budget goes to Europe’s regions and towns, businesses, scientists and citizens, with half of it targeting growth and employment. The rest supports the functioning of EU institutions.

Next steps

It is now up to EU governments and the European Parliament to come to an agreement on the budget proposal.

More on the EU budget