Cause and Effect in European Politics and Law

Again little budgetary surplus of the EU

Adelina Marini, April 16, 2009

Bulgaria has received 5 million euro back from the budget of the EU for 2008 according to the rules for budgetary surplus spending. Second consecutive year the European Commission makes almost minimal surplus - 1.5 % of the overall budget remained unspent. This equals 1.79 bn euro of 115 bn for 2008. For example for 2001 the surplus was 16 % of the budget for that year. The biggest amount has been returned to Germany which is the biggest net contributor to the European budget.

At the end of last year when it became clear that the current financial and economic crisis would be more severe than previously estimated, the European Commission came out with a proposal to influence the European economy. The package, presented by the European Commission president Jose Manuel Durao Baroso, is for 5 bn euro and will be spent for big infrastructure investments in broadband Internet for the poor regions of the EU as well as the building of reserve gas infrastructure, especially in the shadow of the gas war between Russia and Ukraine in the beginning of the year. A very serious problem for the realisation of the project is its financing. The proposal of Baroso was the 5 bn euro to come from the budgetary surplus for 2008 which by that moment was still unclear how much it would be. The budgetary affairs commissioner Dalia Grybauskaitė presented its report yesterday. On the spring European Council, when it was finally agreed how the money from the package should be spent, it again remained unclear where the money would come from. According to the agreement Bulgaria is to receive over 100 mn euro for the financing of interconnection with Romania and Greece, as well as for broadband Internet for the poorest regions. But unless it is decided where the 5 bn euro will come from, no projects can be started. And one of the key projects which was decided to receive financial aid is the alternative pipeline "Nabucco" for which the EU leaders decided to give only 200 mn euro.

Meanwhile today members of the European Parliament reached an agreement with the Czech Presidency of the EU the Recovery plan of the EC to be financed with unspent money but priority should be given to energy efficiency and renewable energy. Still the Plan must be approved by the European Parliament as it is expected the first reading to be during the session of the Parliament between 4th and 7th of May.

This year the budget of the EU is 133 bn euro. The main expenditures will be for research, innovation, employment and regional development programmes to help Europe respond to the current economic crisis - 45 % or about 60 bn euro. The money for agriculture will remain stable expenditure this year too - 40 % from the overall budget which was actually planned in the financial perspectives until 2013 when it is expected the discussions on whether the amount of the CAP should be diminished will start anew. At the moment CAP "eats" over 40 % of the money of the European taxpayers with disputable effect either for the farmers or for the European economy as a whole.