On 17 November 2016 the Council and European Parliament reached an agreement on the 2017 EU budget which strongly reflects the EU’s main policy priorities. Total commitments are set at €157.88 billion and payments at €134.49 billion.
The budget coincides with the European Semester Autumn Package which sets out the EU’s economic and social priorities, building on the guidance from President Juncker’s 2016 State of the Union address and the latest economic data from the Commission’s Autumn 2016 Forecast.
“The strength of the 2017 EU budget lies in its focus on priority measures such as addressing migration, including by tackling its root causes, and encouraging investment as a way to help stimulate growth and create jobs. This maximises the budget’s impact to the benefit of EU taxpayers, European citizens and companies. And it respects member states’ continued efforts to consolidate their public finance”, said Ivan Lesay, State secretary for finance of Slovakia and President of the Council.
The EU will be committing €5.91billion to tackling the migration crisis and reinforcing security, meaning that approximately 11.3% more will be available for aiding member states with these issues and also allowing for greater security measures to be provided for than those previously in 2016. More funds will also be available in 2017 for the resettlement of refugees, the support for integration measures, the creation of reception centres and the returns of those who have no right to stay in member states.
The EU’s commitment of €21.3 billion to boost economic growth and create new jobs is increased by around 12% on 2016, and this includes significant improved investment in areas such as the European fund for strategic investments (which raises by 25% to €2.7 billion) and the youth employment initiative (which receives a fiscal boost of €500.00 million).
The fiscal stimulus comes as a response to those who feel let down by the establishment, said Mr Pierre Moscovici, the EU’s commissioner for Economic Affairs, who presented the new policy. The unveiling of the shift to a more expansionist economic outlook was couple with a ‘pardon’ for Spain and Portugal who were both reprimanded for breaching EU fiscal rules last summer, in a move which could be seen by the EU as an attempt to rally a united Europe for the tough year ahead which is likely to see the triggering of Article 50 and national elections in both Germany and France.
The budget may come at a bad time for Teresa May, as the UK’s net contribution to the EU budget is set to rise by upwards of £700 million due to a drop in sterling, increasing tension with European partners who already have to make up a 1.7 billion gap from the UK this year.
The arrival of the budget has also stirred conversation among EU member states as they look to the future, and a post-Brexit Europe. Germany’s deputy finance minister has stated this month that he does not believe that the EU’s budget should automatically remain at its current level once the UK (one of the EU’s largest net contributors) leaves the bloc.
How the EU will be able to tackle the future problem of a well financed, post-brext Europe is a problem which looms on the horizon, but in the meantime it appears that the EU is putting its money where is mouth is in order to deliver a safer and more secure Europe for its citizens.