Brussels, 13/11/2014 (Agence Europe) - On Thursday 13 November, the Committee of Permanent Representatives of the Member States to the EU (Coreper ) failed to reach a compromise on the amending budgets for 2014, which would have made it possible to pay the overdue bills of €24 billion.
Differences of opinion also arose on another element of the package to be examined by the 'Budget' Council this Friday 14 November - the proposal modifying the rules on adjusting the contributions of the member states to the budget of the EU (EUROPE 11195).
The budgetary row is at its height. On Thursday, the member states failed to agree on the draft amending budgets for 2014. This does not bode well for the meeting of the conciliation committee (EP/Council) to be held at around noon this Friday, on the sidelines of the Ecofin Council. The European Parliament has called for the amending budgets for 2014 to be approved before discussing the draft budget for 2015.
Meeting in its 'budget' format, the Ecofin Council will examine a 'package” made up of the following elements: the amending budgets for 2014, the draft budget 2015 and the proposal on own resources. It will meet at 10 in the morning to prepare for the conciliation meeting. Following this meeting, the Council will meet, either to approve the compromise or to decide on the next steps to be taken. The conciliation procedure expires on Monday 17 November.
Opposition between net contributors and cohesion countries
At Thursday's meeting of Coreper, the so-called 'net contributor' countries (United Kingdom, Germany, the Netherlands, Finland, Austria, etc) refused to accept the Commission's proposal of mobilising the 'contingency margin' to the tune of €4 billion, in order to pay some of the bills. This flexibility is laid down for unforeseen or urgent expenditure. The net contributor countries take the view that the conditions have not been met to use this instrument, as the Commission is proposing to use it for past invoices. The so-called 'cohesion' countries, such as Poland and Greece (the countries which are the hardest hit by the negative effect of the unpaid bills), got behind the Commission's proposal. The Italian Presidency of the Council has suggested a compromise whereby the proposal is accepted, but with €240 million to come off the four billion figure. This compromise failed to win the net contributors over.
Own resources
Coreper also looked at the proposal to allow the United Kingdom to stagger its payment of the budgetary supplement of €2.1 billion it has been asked to pay until 1 September 2015. There are “quite a few details still to be settled”, sources reported. “All of the countries have differing interests”, added one of them. Some want to pay and receive money in 2014, others want to do everything in 2015, another group again wants to receive money in 2014 and pay in 2015. France, for instance, hopes to receive its envelope (€1 billion) in 2015.
A budgetary trial involving the EP, the Council and the Commission took place after Thursday's Coreper meeting, but without much success.
Amending budgets 2014. The European Parliament has been reiterating this point since 15 October: 2014 comes before 2015. In other words, the EP wants the Council to approve the various amending budgets for 2014 before it goes on to discuss the elements of the 2015 budget. In 2014, there was what the president of the committee on budgets, Jean Arthuis, refers to as “Manna from heaven” of five billion euros (in fines as a result of Court of Justice rulings). The member states have asked for this five billion to be given back to them. However, the EP wants this money to be redirected, on an exceptional basis, to pay off the debts (invoices), which currently stand at €24 billion (situation correct at 31 December 2013). According to estimates, the total level of unpaid bills is expected to be in the region of €28 billion in 2014. This is due to the “snowball effect”, as Arthuis put it.
A summary of the amending budgets put forward by the Commission: - no. 2/2014 budgetises the surplus of one billion resulting from the execution of the budgetary year 2013. The EP in the Council have already approved their positions. At its plenary session, the EP adopted an amendment providing for the budget surplus of the previous year to be used for a new reserve, aiming to cover additional payment needs in 2014. The Council has rejected this amendment; - in amending budget 3/2014, the Commission proposed to increase the payment appropriations by €4.7 billion in order to cover payment shortages. This extra amount will be paid for out of the non-allocated margin available within the upper limit of the payments under the MAFF 2014 and by using the 'contingency margin' of €4 billion. The use of the contingency margin in 2014 would be offset by reducing the available amounts within the payments of the MAFF by around €1.3 billion for each of the years 2018, 2019 and 2020; - no. 4/2014, modified by an amending letter, aims to incorporate the additional revenue (€2.4 billion), mainly from fines; - no 5/2014 aims to mobilise €47.0 million in commitment appropriations and payment appropriations from the Solidarity Fund of the EU (for Italy, Greece, Slovenia and Croatia); - 6/2014 aims to include in the EU budget the amount of €9.5 billion from the revision of the EU resources forecast following the corresponding reduction in the national GNI (gross national income) contributions. It also includes an increase in traditional resources, reducing the member states' contributions to the EU budget by a total of €420 million; - 7/2014 aims to make €79.7 million available in commitment and payment appropriations from the EU Solidarity Fund (including €60.2 million for Serbia).
The MEPs take the view that it is extremely important the amounts brought in by fines (draft amending budgets 3 and 4) and the 2013 surplus (draft amending budget 2) are not returned to the EU countries, but are used to pay the bills, most of which date back to the financial framework 2007-2013.
Budget 2015. The Council's position, which was adopted on 2 September, limits the total level of payment appropriations to €140 billion (+3.3% compared to 2014) and the level of the commitment appropriations to €145.08 billion (+1.7%). The EP would like to see payment appropriations of €146.42 billion (+8.1% compared to 2014) and commitment appropriations of €146.38 billion (+2.6%). The EP is aware that it will ultimately be necessary to limit the payment appropriations. This is consistent with the need to reduce unpaid bills and to reduce the gap between commitments and payments. (LC)