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EU budget 2014: Despite pledges, Council seeks to cut growth and jobs spending

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837_9747097b638f44ed6a4e8b2957865290The Council's proposed cutbacks in EU research and employment spending contradict its own promises, MEPs commented on the draft budget for 2014 as presented by the Council's Lithuanian Presidency on 10 September.

The Council proposes a budget of €142.5 billion in commitments and €136.1 billion in payments, i.e. cuts of €9 billion (-6%) in commitments and €9.5 billion (-6.6%) in payments compared to this year.

Council's budget stance contradicts its promises for economic recovery

Despite its recent promises to prioritise (youth) employment and growth-stimulating programmes for research, education and small- and medium-sized enterprises, these are precisely the areas where the Council proposes the deepest cuts, totalling €426 million (-3%).

"The Council has chosen to do 'business as usual' by cutting the Commission's already very tight budget proposal. It is unacceptable that the Council should make the biggest cuts in growth policies such as research and innovation," said 2014 budget rapporteur Anne Jensen (ALDE, DK).

The Council also proposes cuts of €157 million in external policy (- 2.5%) and €153 million in administration (-1.8%). The least-affected spending areas are the structural funds and agriculture.

Payments shortfall and the gap between commitments and payments

Meanwhile the long-standing issue of the payments shortage for 2013 has yet to be resolved and MEPs fear that it might affect the budget negotiations unless a swift solution is found. Early this year, the Commission estimated it would run short of €11.2 billion to pay its outstanding bills this year, but so far the member states have agreed to only €7.3 billion.

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Parliament is also concerned about the mounting cost of outstanding commitments that have yet to be turned into payments (the so-called reste à liquider (RAL)). The RAL will amount to €235 billion by the end of this year, adding substantially to all future payments.

What's next?

Parliament's Budgets Committee will state its position on the Council amendments on 2 and 3 October. This position will be put to a plenary vote on 23 October. If the Council does not accept Parliament's changes, a 21-day conciliation period will follow.

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