Brussels, 18/12/2014 (Agence Europe) - After the agreement reached between the institutions of the EU on the amending budgets for 2014 and the 2015 budget, European Parliament President Martin Schulz told the European Council on Thursday 18 December that the EU “is in danger of running up a structural deficit”.
“We are trapped in quite a Kafkaesque situation”, he said. The EU is not allowed to go into debt, but is running up a structural deficit. “If the EU was a state, the Commission would even have to open an excessive deficit procedure!” he railed. He noted that, in recent years, the gap between commitments made and the payment appropriations actually available has widened. EU governments and the European Parliament agree on a set of programmes (such as Erasmus, Horizon 2020, or cohesion policy). The programmes are then implemented as agreed, contracts are concluded and people expect the EU money they have been counting on. “But then, suddenly, you stop paying the bills, and the bills keep piling up. With one hand you commission programmes and with the other hand you take away the money for the same programmes. This must go wrong”, he argued.
From one year to the next, the unpaid bills have snowballed into a deficit of €25 billion. The deficit will further increase next year as more bills will come in, because next year is the deadline for handing in bills for projects funded under the MFF 2007-2013, Schulz said.
Putting €3.5 billion on the table now when €25 billion are missing “is simply not good enough”. Instead of going down the slippery slope of a debt union, “we must find a responsible and sustainable solution”, he argued. The agreement was based on a common understanding about a payments plan and the Parliament expects the Commission to come up with a proposal at the beginning of next year. Schulz also suggested re-visiting the idea of using “unexpected streams of revenue” for the repayments of bills. The battle on this was hard-fought: the member states wanted to recover all the revenue from fines before agreeing that some of this money should go towards payment of the most urgent bills. “In the end, it's people who suffer if EU programmes are cut because we can't pay our outstanding bills”, he regretted. The stability of the EU budget is crucial for the credibility of the investment plan, he went on. “Let us work together in good faith to find a sustainable solution with a payment plan. Let us make sure that we are not undermining the investment plan from the word go”, he urged. (LC)