Dods EU Alert: EU programmes in budgetary jeopardy again

MEPs have said in plenary that the EU must stop rolling over its growing portfolio of unpaid bills from one year to the next. 

By Dods EU monitoring

17 Jul 2014

The EU must stop rolling over its growing portfolio of unpaid bills from one year to the next, said MEPs in Wednesday’s debate on the alarming shortage of funds for payments due in 2014. Unless a satisfactory solution is found, programmes such as Erasmus+, research projects and humanitarian aid to Syrian refugees will get stuck, new ones will be grounded and beneficiaries will have to wait for money they worked for, warned the Commission and many MEPs.

End hypocrisy: the EU must pay bills falling due in 2014

As in 2011 and 2012, due to funding shortages the Commission was not in a position to pay all its bills in 2013. Many were rolled over to 2014 and as a result overdue payments ballooned to over €23 billion. This year, funds are running out even earlier than last year, and EU programmes are in jeopardy, the Commission warned.

ˮFrom year to year, unsettled bills accumulate. (…) At the start of this parliamentary cycle we need to stop this slippage, to keep our finances in orderˮ, said newly-elected chair of Parliament’s Budgets Committee Jean Arthuis (ALDE, FR), noting that ˮUnpaid bills include those of hospitals in the Middle East, exchange students on Erasmus+ programmes, researchers and businessˮ.

"We have to stop the hypocrisy: the credibility of the EU is at stake. Our heads of state and government have to stop making promises without delivering the funds to live up to them", he added.

MEPs expressed dismay at the Council’s habit in recent years of cutting payment budgets, even though payments are needed to meet its own previous commitments.

The European Commission is legally obliged to pay its outstanding bills, yet the Council's stance is driving the budget into a de facto deficit, MEPs warned.

Commissioner Androulla Vassiliou urged the Council and Parliament to find an agreement. The current shortfall of funds "undermines the EU's credibility", she said. The proposed amending budgets of €4.7 billion to bridge the gap would cost the member states "virtually" nothing since they could be funded from exceptional revenues as fines, interests and surpluses on own resources, she added..

Cuts in next year's funding are unacceptable

Payment difficulties in the second half of this year could be aggravated if unpaid bills from 2014 are allowed to “snowball” into 2015, warned several MEPs in a reference to the Council’s intention to cut the Commission's Draft Budget for 2015 by €2.1 billion. Mrs Vassiliou pointed out that the Commission's proposal for money available in 2015 was the absolute minimum level needed to settle invoices.

The Council proposed that the largest cuts should be made in funding for growth and jobs policies and the EU's foreign policy work, despite giving political pledges to the contrary at the recent European summit.

Next steps

The Council will adopt its formal position on the draft budget for 2015 at the start of September and  Parliament will state its position on the Council’s amendments on 6-7 October.


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