On Thursday, 30 June, the European Commission initiated the EU 2017 budget project of EUR 134.9 billion. The main focus will be on two main priorities: support of recovery of Europe’s economy and resolution of problems associated with security and humanitarian problems in neighbouring countries.

Increased finances will be provided to growth, creation of jobs and making the European Union more competitive, as well as provide the necessary resources to protect Europe’s borders.

«The EU is facing massive challenges and in these difficult times a focused and effective EU budget is not a luxury but a necessity. It helps buffer against shocks, providing a boost to our economy and helping to deal with issues like the refugee crisis. As always, we continue to focus our budget on results, making sure that every euro from the EU budget is well spent,» – said European Commission Vice-President Kristalina Georgieva.

The proposed budget operates within the tight limitations set by the European Parliament and Member States in the Multi-annual Financial Framework. Within those boundaries, the Commission is proposing to be as flexible and focused as possible. It is providing the necessary means to move forward in priority areas whilst reducing spending for less urgent activities.

The European Parliament and the European Union Member States will now jointly discuss this proposal.

The money specifically for supporting economic growth will total EUR 74.6 billion in 2017, compared to EUR 69.8 billion in 2016. This breaks down as follows:

It is planned to provide EUR 21.1 billion on growth, employment and competitiveness. This includes EUR 10.6 billion for research and innovation under Horizon 2020, EUR 2.0 billion for education under Erasmus+, EUR 299 million for small and medium sized-enterprises under the COSME programme, and EUR 2.5 billion under the Connecting Europe Facility.

EU plans to allocate EUR 2.66 billion for the European Fund for Strategic Investments (EFSI), the vehicle behind the Investment Plan for Europe. This is a success story for Europe, which has secured EUR 106.7 billion in investments in 26 EU Member States in less than a year. EUR 53.57 billion will be allocated to support productive investments and structural reforms to foster convergence among Member States and among regions via the European Structural and Investment Funds (ESIF).

Support to European farmers is proposed at EUR 42.9 billion.

The Draft of the EU Budget 2017 proposes EUR 5.2 billion to reinforce the external borders of the Union and address the refugee crisis and irregular migration by funding stronger tools to prevent migrant smuggling and address the long-term drivers of migration in cooperation with countries of origin and transit, stronger policies for legal migration, including resettlement for persons in need of protection, and instruments to support Member States with respect to the integration of refugees inside the EU.

The Draft EU Budget includes about €3 billion to fund actions within the EU, such as: the setting up of the European Border and Coast Guard; the proposal for a new Entry-Exit System to strengthen border management; the proposals to review the Common European Asylum System, including a reform of the Dublin mechanism; the establishment of an EU Agency for Asylum.

It also includes the allocation of EUR 200 million for the new instrument to provide humanitarian assistance within the EU.

Furthermore, the draft budget proposes EUR 2.2 billion for actions outside the EU, in order to address in particular the root causes of the refugee flow. This includes in particular: EUR 750 million under the Facility for Refugees in Turkey, to help reach the EUR 1 billion contribution to this fund from the EU budget; the pledge for Lebanon and Jordan made at the UN London conference with EUR 525 million from the EU budget, EUR 160 million from the Syria Trust Fund and EUR 200 million of macro-financial assistance.

In light of the growing security challenges the EU and its Member States are facing, the Draft EU Budget 2017 is also allocating significant resources for security: EUR 111.7 million will go to support Europol and EUR 61.8 million will be dedicated to enhancing the security of the EU institutions, together with an extra EUR 16 million for security measures in 2016.

In line with the increasing importance of stronger European defence cooperation, the Commission is also proposing a preparatory action for research in the defence area with EUR 25 million in 2017.

The EU budget amounts to roughly 1% of EU GDP, but thanks to its multiplication effect and its focus on results, it has a big impact. Over 2007–2013 for instance, the average increase in GDP as a result of Cohesion Policy is estimated at 2.1% a year in Latvia, 1.8% a year in Lithuania and 1.7% a year in Poland.

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