EU finances simplified

Splendidly straightforward analysis at European Democracy of the arguments over the EU budget which are expected to dominate this week's summit. It thankfully avoids the technicalities (such as the distinction between commitments and payments) to concentrate on what actually matters. Extract:

"Although the ceiling of own resources has been 1.24% of the EU’s GNI for years, annual budgets have never really exceeded 1% of GNI. For the new Financial Perspectives, however, the Commission is proposing a payments ceiling of 1.14% on average. It says higher expenditures (relative to GNI) are necessary because member states have been transferring more tasks to the EU level (Lissabon process, external policies, justice and home affairs), and because of the Union’s enlargement which increased the EU’s population with 30% but its GNI only by 5%.
A group of six member states, all net payers, disagree. These six (the UK, France, Germany, the Netherlands, Austria and Sweden) want to limit the EU’s expenditures to a maximum of 1% of EU GNI. Brushing aside the Commission’s arguments, they say 1% is possible, because most budgets in the past did not surpass that limit either. They add: “In view of the painful consolidation efforts in Member States our citizens will not understand if the EU budget were exempt from this consolidation process.”
Rather cheekily but not without grounds, the Commission’s reply to this is that national budgets, which take up 45% of EU GNI, increased more than twice as fast over the past seven years as the EU’s budget of just over 1% of EU GNI. The Commission also expects an end to underexpenditures in funds allocated to the ten countries that joined the EU in 2004, as a result of improving administrative capacity. It therefore fears limiting the EU’s budget to 1% of GNI requires more serious budget cuts than it would seem at first sight."

Shame that the mainstream media are incapable of producing anything remotely comparable.