Financial Discipline for 2014

Single Payments for 2014 may fall by more than previously forecast.  Proposals from the EU Commission suggest that ‘Financial Discipline’ could be invoked on this year’s support payments, with an estimated reduction of 1.3%.

Financial Discipline is the mechanism by which spending under Pillar 1 of the CAP is controlled.  If total payments for the year look like exceeding the limit within the EU Budget, then all direct aid across Europe are reduced by a percentage.  However, the first €2,000 of the Single Payment is exempt from any cut.  It was used for the first time under the 2013 SPS with a 2.45% cut.  The Commission is currently estimating that a 1.3% deduction will be required for 2014.  This is on top of a reduction in the UK’s Pillar 1 budget of around 3% for the 2014 year.  Payments in some regions, notably Wales, will fall by even more due to higher rates of ‘Pillar Transfer’ than the previous modulation percentages. 

This is only an initial estimate.  The final deduction will not be set until the autumn.  It could be higher or lower than the current 1.3%, but last year the deduction started off being estimated at 4.98% before finishing at 2.45%.