Update on negotiations Post 2006
The UK Presidency successfully negotiated agreement on the EU budget at the European Council held on 15 and 16 December 2005. The agreement has set the overall EU budget at €862 billion (c.£584 billion), or 1.045% of EU Gross National Income (GNI) for the 2007-2013 financial period. This is in comparison to the 1.24% suggested in the Commission's proposals published in 2004.
This agreement included a reduction in the UK rebate over the period and a commitment to a comprehensive review of the EU budget, including the Common Agriculture Policy (CAP), in 2008-09. Although the Member States have now reached a deal, the budget is not yet entirely finalised as the agreement must be ratified by the European Parliament in 2006. The Parliament has the right of Assent on the budget which means that they can either accept or reject the budget as a whole but cannot amend any of the detail.
As part of the deal the European Council has agreed that there should be a Structural and Cohesion Funds budget of €308 billion (c.£209 billion), representing 0.37% of EU GNI, for the 2007-2013 Financial Perspective. This will be focused on three Objectives:
Convergence Objective for the poorest regions of the EU with a Gross Domestic Product (GDP) below 75% of the EU average;
Competitiveness Objective for other regions; and
Cooperation Objective for cross border and trans-national projects.
Alongside the budget negotiations, negotiations have also been ongoing on the Commission's draft European Structural Funds regulations for 2007-13, which will outline how future Structural Funds can be spent. These discussions are being conducted in the European Council's Structural Actions Working Group (SAWG). Now that an agreement has been reached on the EU budget it is hoped that negotiations on the content of the regulations will be concluded as soon as possible to allow development of Structural Funds programmes to be completed ahead of January 2007.
Further details:
Read the Prime Minister's statement on the EU budget agreement and the full transcript of his press conference with European Commission President Barroso.
Read the Parliamentary statement by DTI Minster for Industry and the Regions, Alun Michael MP.
Read the transcript of Allan Wilson's (Scottish Executive Deputy Minister for Enterprise and Lifelong Learning) appearance before the Scottish Parliament's European and External Relations Committee on 20 December 2005.