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Thursday, October 02, 2014

When is money not "real money"? Let's ask the European Commission...

There is a select group of masochists out there (us included) who devote their time to studying the inner workings of the EU budget. Its a very dry and technical process but at the end of the day the numbers matter - the UK's gross annual contribution (post rebate) this year is around €14.7bn, which easily exceeds the £7bn in fresh tax cuts David Cameron pledged at the Tory party conference yesterday.

Today, Commission President Barroso urged member states to sign off on a €4.7bn 'top up' to this year's budget, an issue we covered back in June. What struck us however was some of the language in a separate Q&A put out by the Commission, which contains gems like:
"The EU budget consists of commitment appropriations and payment appropriations. Broadly speaking, commitments are usually higher than payment appropriations and do not constitute "real money"; they could be compared to the amount mentioned in a contract any household or private company commits itself to pay at the completion of any given work. Payments, on the other hand, are "real money"; they are what the EU budget has to pay, again, just like any household or private company has to pay the builders once any contracted work is completed."
However, it is highly disingenuous to describe new spending commitments in the budget as not "real money" given that they are inextricably linked with payments: as the Commission itself is fond of saying, today's commitments are tomorrow's payments while today's payments are yesterday's commitments. 

It might however explain why the Commission is so frivolous when it comes to making new spending promises before then pressuring national governments to stump up extra cash i.e. "real money" to make up the difference.


4 comments:

Jesper said...

I wonder what their definition of budget is?

Anyone responsible and accountable for budget-overruns or is that position one of the things that was cut in a cost-saving effort?

Anonymous said...

If this is not real money, then
perhaps Barroso can dip into his
own pocket and find some EU `fairy dust`and pay with that.

Anonymous said...

Or the EU could just pick money off of the same "money tree" that our own Labour Party plan to use?

SC

R Davis said...

You the government of Transylvania sign off on a budget of $400 billion
This means that you nation only has that $300 billion to work with within the nations expenditure & nothing more.
Then there are the traders who create expenditure when they bid for goods & services. This 'expenditure' is outside of the $300 billion that the nation has been allocated
Credit in loans are also outside of the $300. billion you have been allocated...
Q:-
WHEN DO YOU COUNT ALL THE "GOINGS ON" SO AS TO KNOW HOW MUCH "MONEY/VALUE" IS IN CIRCULATION ?

Isn't it all just a sham ?