"The proposed increase of 2.1% in commitments and 1.3% in payments is virtually absorbed by the estimated inflation rate for 2015."A below inflation increase would amount to a real terms cut which would be welcome but is that really the case?
The 2014 budget as signed off by member states and the European Parliament sets the level of payments at €135.5bn, so in actual fact the Commission's proposal constitutes a 4.9% increase, not 1.3%. So what accounts for the difference?
Well, a couple of weeks ago, on the 28th of May to be exact, the Commission proposed to retroactively top up the budget by €4.7bn in order to
"cover legal obligations in research and innovation, education and support for small and medium-sized enterprises. Higher reimbursement claims from Member States in cohesion policy have to be addressed as well as the difficult situation in the Ukraine."This €4.7bn would come from a mixture of spare cash from the 2013 budget and income from fines levied by the Commission on companies breaking EU law as well as fresh funds from member states. However, this top-up still needs to be signed off by member states (the decision will be taken under QMV) so it is disingenuous to tack it onto what has already been agreed and present it as a lower overall increase.
Ultimately, the top-up itself is not completely the Commission's fault - member states often submit higher claims than the agreed budget allows, forcing the Commission to retroactively top the budget up (this annual ritual is as depressing as it is predictable). However that does not justify the Commission putting such dubious spin on the issue. This kind of stuff doesn't help in boosting citizens trust in EU just after the European elections produced a record strong showing for anti-EU parties.