© European Union, 2013
2014: budget problems
The European Commissioner for Budget and Financial Programming, Janusz Lewandowski, has expressed deep concerns over the Council of the European Union’s suggested amendments to the EU’s 2014 budget. The Council has proposed reducing commitments by €240m and payments by over €1bn, on top of cuts already outlined by the Commission. The changes could also have an impact on the funding for the first year of Horizon 2020.
The European Parliament will now have its say on next year’s budget. Addressing the MEPs in Strasbourg, Lewandowski outlined his greatest anxieties.
“I wish to express my deep concern at the Council’s reading of the 2014 draft budget. The budget proposed by the Commission at the end of June was not like any draft budget proposal of recent years. It was prepared in the very specific context of an advanced stage of negotiation on the Multiannual Financial Framework (MFF) for 2014-2020, in which ceilings for both commitments and payments would be very much tighter.”
The Commissioner outlined how, compared to the 2013 budget, it had already made spending cuts, including a €9.1bn reduction in commitments and €8.4bn reduction in payments. Lewandowski said the Commission acknowledged that this was “not business as usual” and that it did not seem possible that the Council would call for further cuts.
Cuts
The Commissioner outlined key specific areas that would see the largest reductions in spending in the Council proposal, areas of expenditure that have been defined as key to helping Europe during its economic recovery.
“Whereas all institutions share the aim of promoting growth and employment, the Council has cut the payments (€202.2m) for the structural funds under heading 1b, a key policy for Europe’s economic recovery.
“The biggest cuts for payments by volume are in heading 1a – a reduction of €426m. This seems entirely at odds with the repeated calls from the European Council to rapidly implement the Structural Funds as well as the programmes for the Competitiveness of Enterprises and SMEs (COSME) and for research and innovation (Horizon 2020). It has also reduced the administrative support expenditure for research and payments for the major infrastructure projects so dramatically, that it can only hinder implementation.
“This continuous year after year reduction on the overall level of payments is very worrying, particularly when we are at the end of the lifecycle of the projects and MFF period, and as the Council underlines, reste à liquiders (RALs) (outstanding commitments) have to be addressed,” Lewandowski continued.
“The 2014 payment ceiling is €8.5bn below what the Commission requested in 2013, including the Draft Amending Budget 2. This is already very tight, given the potential backlog of payment claims.”
The Commissioner called for a “sound approach”, appealing to MEPs for their support to “restore adequate payments” for the 2014 budget.
“More than 90% of the payments requested in the draft budget will be used to address non-differentiated expenditure and the RAL, with less than 10% related to new programmes. The Commission is convinced that this split adequately takes into account any possible delays in the implementation of new programmes and is justified by the needs we have expressed, not least the current rate of implementation.”
European Parliament
Lewandowski appealed to MEPs to consider the concerns he had outlined during the Parliament’s reading of the budget. The Commissioner said he believed it was in everyone’s will to achieve a deal within 21 days budgetary conciliation process and promised that the Commission would adjust its budget proposals to reflect the situation and would shortly publish two amending letters to the draft budget.
“An amending letter published in mid-September will take into account the political agreement of the MFF negotiations. It will contain the provisions for the frontloading-backloading agreed for some of the programmes (COSME, Erasmus, Horizon 2020). The amending letter will also take account of the European Council conclusions on additional assistance to Cyprus from the Structural Funds as well as provisions to adapt the structure of the Joint Undertakings to reflect their role in the new Horizon 2020 programmes.
“The usual updating for agriculture and fisheries will be presented in mid-October. Of course, due to the financial discipline, any reductions for market measures will simply increase the payments to the farmers.”
The Parliament will now review the proposed annual budget and will either approve the Council’s changes or propose further modifications. If MEPs do suggest further amendments, a three-week conciliation period will be instigated between the Council and the Parliament.
Janusz Lewandowski
