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Facts and figures on the EU's 2014-20 budget

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(Globalpost/GlobalPost)

European Union leaders gather in Brussels for an extraordinary two-day summit Thursday aimed at agreeing the bloc's contested trillion-euro budget for 2014-2020.

The budget comprises three main parts -- the Common Agricultural Policy which covers farm aid, Cohesion Funds which help poorer member states catch up with their peers, and programmes to boost innovation and jobs.

The talks promise to be tough as the 27 member states fight it out after a bad-tempered November summit failed to agree on compromise proposals submitted by European President Herman Van Rompuy.

Van Rompuy put forward a budget of 973 billion euros ($1.33 trillion), compared with the five percent increase to 1.04 trillion euros submitted by the European Commission.

Britain led calls for even sharper reductions, to less than 900 billion euros, arguing that the EU could not expect an increase in spending at a time of austerity for national governments.

EU leaders have said the talks Thursday and Friday are likely to prove very difficult again but analysts expect an accord, warning that another delay could be a serious blow to confidence.

Herewith the main facts and figures behind the spending plans.

THE BUDGET

The seven-year budget, known as the MULTIANNUAL FINANCIAL FRAMEWORK (MFF), sets spending priorities over the period after the bloc's leaders negotiate national contributions and ceilings for each of the five broad categories of expenditure.

GROWTH

The European Commission plan allocates 339 billion euros to Cohesion Funds which help newer members invest in the social and economic infrastructure needed to help them catch up with their EU partners. Another 164 billion euros goes to promote economic growth and job creation. Combined, this spending accounts for some 48 percent of the budget.

FARM SUPPORT/ENVIRONMENT

The second largest spending component of the budget is put at some 390 billion euros, of which 290 billion euros is for the Common Agricultural Policy which supports farmers. The balance covers rural development, fisheries and environmental protection.

EU GLOBAL ROLE

Some 72 billion euros is set aside for humanitarian aid, promoting human rights, development and regional neighbourhood policies.

ADMINISTRATION

More than 63 billion euros cover EU administrative costs.

REVENUE to finance the seven-year budget comes from three main sources:

- Contributions from each of the 27 member states based on their Gross National Income (GNI). This is the largest source, accounting for 68 percent of revenue.

- Customs duties on imports from outside the EU, alongside a "sugar" levy, accounting for 12.9 percent of revenue. EU governments keep 25 percent of the monies raised to cover the cost of collection.

- A levy on the VAT base of each member state, capped at 50 percent of their GNI. This accounts for 11.4 percent of all revenue.

Cash left over from previous years and fines for breaching EU rules and regulations make up the rest of the EU's resources.

The budget works out at 0.64 euros per day for each of the bloc's 500 million citizens.

Talk of an EU tax has been aired but never approved. Proposals on increasing the EU's own resources are not aimed at increasing the budget but rather at reducing contributions by member states.

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http://www.globalpost.com/dispatch/news/afp/130206/facts-and-figures-the-eus-2014-20-budget