The European Union plans to increase spending by nearly 5% in 2012, and it wants its member states to pay up for it, according to the EU’s press release.
Administrative spending is being frozen for the year, but that only makes up 6% of EU spending.
Total spending for the 2012 EU budget will be €132.7 billion ($192.3 billion). To put that in context:
- German Federal budget 2012 projection: €303.8 billion ($424 billion)
- UK budget 2012: £702 billion ($1.15 trillion)
- U.S. budget 2012: $3.07 trillion
So it’s not an incredibly lardge budget. But it relies on Europe’s biggest players, like the UK, Germany, and France, to pay the majority of the bill.
The reason for the increase in overall spending is that projects that began in 2007 are now in a critical stage in which increased spending is required.
EU funded programmes launched in 2007 are now running at full speed. This means that in 2012 we will have more bills to pay to reimburse regional authorities or SME’s that have invested in those programmes. In particular, increased payment levels for the Research Programmes (+ 13.3% to €7.6 billion) and for the structural and cohesion funds (+ 8.4 % to €45.1 billion) aim at maximising the EU budget contribution to economic growth and cohesion.
The proposed increase for next year’s budget amounts to the bare minimum required to honour the Commission’s legal commitments. Any decrease below this figure would require member states and the European Parliament to break the legal commitments that have been made on existing contracts.
The increase in spending is already eliciting opposition, with the UK and the Netherlands already speaking out against the budget, according to the AFP. France and Germany are expected to oppose it as well, as they have called for a freeze on spending through 2020.
But according to the BBC, the UK has given up veto power on the EU budget through 2013.
Without a clear means of opposing the budget, this is likely to act as a support for already growing anti-European Union and euro sentiment across the region.