Brussels, 25/09/2014 (Agence Europe) - At an inter-institutional meeting held behind closed doors in Brussels on Wednesday 24 September, the European Commission and members of the European Parliament once again drew attention to the alarming situation surrounding the payment appropriations. The deficit in payments is expected to stand at €26 billion for the end of 2013 and the EU budget for 2014 is reported to have been practically used up already, which jeopardises the future of certain programmes, such as Erasmus, the European Commission states.
At the meeting, Jean Arthuis (ALDE, France), the President of the committee on budgets of the European Parliament, flagged up the growing timelag between the commitment appropriations and the payment appropriations. As at 31 December 2013, the amounts remaining to be settled are reaching astronomical levels, he said, with the arrears mounting up and increasing: €5 billion at the end of 2010, €11 billion in 2011, €16 billion in 2012 and €23 billion at the end of 2013.
Enrico Zanetti, the Italian Secretary of State for economic affairs, said on behalf of the Presidency that the Council wished to find appropriate solutions to cover the funding for projects already underway. The Commission hopes to start “constructive talks”, he stressed.
Jacek Dominik, the European Budget Commissioner, described the payment appropriations situation as concerning. He said that the problem needed to be resolved “this year”, otherwise the impact of the arrears would be all the greater in the years to come. The Commissioner said that what the EU has to pay for and the level of this expenditure feature in the agreement on the multi-annual financial framework (MFF) 2014-2020, whereas the annual budget is simply the implementation of the MFF. The Council could point out that the MFF lays down limits, and not targets, for expenditure. Dominik highlighted the shortage of payment appropriations and put pressure on the Council to agree to the amending budgets proposed for 2014 and, in particular, the full mobilisation of the €4 billion of the Contingency Margin. The Commissioner went on to state that the adoption of the amending budgets for 2014 would represent a burden on the national treasuries of just €105 million. In reality, taking account of traditional own resources, the burden would be €700 million for the member states, according to one diplomatic source.
Dominik also warned that if amending budget no. 3 was not accepted, a “serious revision of the MFF” would be necessary in 2016. The Commissioner pointed out that for the 2014 budget, the Commission had found just €175 million under the Global Transfer, compared to €1.8 billion in 2010, for example. “We have totally exhausted the redeployment possibilities within the 2014 budget”, the Commissioner pointed out in a press release.
The rapporteur on the 2015 budget, Eider Gardiazabal Rubial (S&D, Spain), called for a gesture from the Council. She referred to a dramatic situation as regards payments, particularly for the structural funds, SMEs and students.
Finally, Zanetti explained that he would try to lead the Council to a position on the amending budgets nos. 3 and 4 for 2014. He stressed that public expenditure was still under pressure and that resources were limited. He advised the Commission to spend wisely.
Payment shortfalls. Commissioner Dominik gave examples of problems stemming from the lack of payments: 1) Horizon 2020: the Commission has had to reduce the level of pre-financing for new commitments, from 60% under the seventh framework programme to 35% under the programme Horizon 2020. Currently, over 70 projects amounting to €36 million are blocked (not counting interest on late payment); 2) Erasmus+: the Commission expects a disruption in the payment of grants to beneficiaries (mainly students); 3) Cohesion: the payment delays are hitting the smallest and most vulnerable beneficiaries (SMEs, NGOs, small local organisations) the hardest; 4) Environment and climate action (LIFE +): 26 invoices to public bodies, amounting to €11 million, have not been paid; 5) Development Cooperation: unpaid pending invoices since 7 July currently amount to €14 million; 6) Neighbourhood (Ukraine, Georgia and Moldova): the lack of EU resources is putting the key reform strategies at risk; 7) Humanitarian aid: projects in Africa and the Sahel region, Haiti and the Horn of Africa are delayed.
Next meetings. The next budgetary trialogue on the 2015 budget will take place on 15 October. On 22 October, the European Parliament is expected to adopt the amendments on the Council's position. A conciliation period will run between 28 October and 17 November, with the first meeting of the conciliation committee on the 2015 budget on 6 November. A further trialogue will take place on 11 November. On 14 November, the ECOFIN Council (Budget) and a further meeting of the conciliation committee will be held. (LC)