EU Budget

The headline points of the agreement on the ‘Multi-Annual Financial Framework (MFF) for 2014 to 2020 are as follows;

• Total EU spending cut by 3% compared with 2007-13 period
• Spending for the CAP drops by between 9% and 10% – with equal cuts in Pillar 1 (Direct Payments) and Pillar 2 (Rural Development)
• The split between Member States is not yet clear – but the UK is likely to fare badly (again) in Rural Development allocation as other countries have been guaranteed top-ups out of the total fund – meaning less is left for others like the UK
• Modulation to shift funds from Pillar 1 to Pillar 2 allowed up to 15%
• Capping to be optional for Member States.

The MFF still has to be approved by the European Parliament.  This could be a problem as many MEPs are unhappy with the deal.   The feeling appears to be that some ‘sweetners’ will be offered to the Parliament such as a mid-term review of the Budget, or the ability to swap spending between headings and years.  The overall ceiling will remain though. 

All this could take some time and means the setting of the 2014 annual EU Budget could be delayed.  The 2013 Single Payment is paid out of the 2014 Budget.  It may not delay payment of the 2013 SPS, but it may be some months before we can work out what the effect of the MFF deal will be on Single Payment levels for this year.