Bloomberg News

EU Budget to Rise 2.1% Next Year as Governments Demand Restraint

December 01, 2011

Dec. 1 (Bloomberg) -- The European Union approved a 2.1 percent increase in spending next year, a smaller rise than in 2011 as national governments insisted on EU budget restraint to match domestic austerity aimed at tackling the debt crisis.

The European Parliament endorsed a 129.1 billion-euro ($174.1 billion) budget for 2012 compared with 126.5 billion euros this year, when spending is growing 2.9 percent. EU governments gave their backing yesterday to the 2.6 billion-euro boost next year in total expenditure, almost half of which goes to agriculture.

“If everyone is tightening their belts in Europe, the European institutions must do the same,” Alexander Alvaro, a German member of the 27-nation EU Parliament, said in an e- mailed statement today in Brussels.

The 2012 budget is the sixth under a multi-year EU spending program that locked in farm spending through 2013. The program fixed total expenditure in 2007-2013 at 864 billion euros, or 1.05 percent of the region’s gross domestic product. The expenditure next year amounts to 1 percent of the EU’s GDP. By comparison, national spending in the EU averaged 51 percent of domestic GDP in 2009.

The other main part of the EU budget goes to foster development in poorer European regions, leading this policy area and agriculture together to soak up around four-fifths of the total. Next year’s spending plan earmarks 57 billion euros in farm expenditure and 43.8 billion euros in regional aid.

--Editors: Jennifer M. Freedman, Andrew Atkinson

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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