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ECOFIN (Budget)

Volume 715: debated on Monday 23 November 2009

Statement

My honourable friend the Economic Secretary to the Treasury (Ian Pearson) has made the following Written Ministerial Statement.

On 18 November 2009, I represented the UK at the Economic and Financial Affairs Council (Budget ECOFIN).

Finance Ministers agreed to adopt preliminary draft amending Budget 10 (as updated by the Commission and amended during the course of negotiations) to the 2009 EC Budget. This amends the 2009 Budget to reflect latest implementation capacity, thus reducing the level of funding required from member states in 2009.

Finance Ministers agreed to adopt amending letter 2 to the Commission's preliminary draft Budget for 2010, as amended during the negotiations. This included the latest information on agricultural market prices and other developments, support to nuclear decommissioning in Bulgaria and additional provisions for dairy sector support. In parallel, Finance Ministers also agreed to adopt the Commission’s proposal to amend the inter-institutional agreement of 17 May 2006 as regards the multi-annual financial framework, again as amended during the negotiations.

During a conciliation meeting between the council and the European Parliament, agreement was reached on the 2010 EC Budget and to finance the outstanding €2.4 billion tranche of the European economic recovery plan, in full, with no increase to the 2007-13 financial framework. Financing was secured through a substantial reduction to the agriculture heading ceiling and smaller reductions to other ceilings including administration. This was matched by a corresponding increase to the spending ceiling for the Budget's competitiveness for growth and employment heading.

The agreement establishes total payment levels of €122,937 billion (1.04 per cent of EU GNI). The European Parliament is scheduled to vote on its own second reading between 14 and 17 December, after which the 2010 EC Budget will be formally adopted. By working with our like-minded partners the Government secured a 2010 budget that was €4.6 billion (4 per cent) lower than that proposed by the European Parliament and lower than the Commission's proposals.

Four joint statements relating to the Budget were also agreed at Budget ECOFIN. These concerned: the continuity of the 2010 budgetary procedure, the simplification and more targeted use of structural funds in the context of the economic crisis, EU buildings policy and the administration heading in 2010. The Government are supportive of these statements, which reaffirm the importance of Community assistance through the structural and cohesion funds, and call for sound financial management and budget discipline in key areas of concern.