1st Oct 2020

Member states owe EU over €320bn

  • Member states owe over €320bn to help finance their EU-funded projects, such as new highways (Photo: David Basanta)

EU internal budget auditors say member states will need to fork out an additional €326 billion to finance their on-going EU-funded projects over the coming years.

The European Court of Auditors, in a report out on Tuesday (25 November), say the budget hole may affect the commission’s ability to meet all requests for payments in the year the requests are made.

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The figure is pulled from the previous longterm budget (2007-2013), also known as the multi-annual financial framework (MFF).

The European Commission, for its part, is downplaying the budget discrepancy and disputes the Court’s €326 billion figure.

It says the commitments for payments is actually €322 billion and that the figure comes as no surprise in the current EU budget cycle (2014-2020).

“It is a big number but if we anticipate it in the future payments, it is less dramatic,” commission spokesperson Jakub Adamowicz told this website.

Adamowicz says the latest report by the Court is an indication it wants to be more pro-active in the EU budget debate.

“They [the European Court of Auditors] are not discovering the world, they are not discovering America,” he added.

Some of the commitments are on paper only and can be written off.

Adamowicz, using the €322 billion, estimates around €20 billion is on paper, based on an overall average of commitments made and those paid since 2000.

This means the member states need to pay out an estimated €302 billion in order for the commission to properly finance the projects already signed off and in progress.

The latest MFF also requires the commission to pay out €908 billion up until 2020.

Igors Ludborzs, a member of the Court, has different views on the gap.

“We don’t see a happy ending. On the contrary, the amounts are becoming bigger and bigger,” he told reporters.

Its “landscape review” report analyses risks to the financial management of the EU budget.

It notes the widening gap between commitment and payment budgets has accumulated over the long term.

It notes the outstanding payment commitments by member states– also known as RAL [reste à liquider] - stood at €222.4 billion at the end of 2013.

Other liabilities, mostly for purchases and staff pensions, amounted to €103 billion, bringing the total to €326 billion.

Adamowicz says the funding commitments for liabilities is less than what the Court suggests.

Whatever the figures, the billions in extra payments set to be demanded from member states comes at a sensitive time.

The European Parliament and the Council – representing member states – are already at loggerheads over the €4.7 billion that the commission has said it needs to for unpaid bills.

Other problems abound.

Member states, knowing they will get the EU funds, have been accused of not taking extra care when following through with projects.

The Court in its report notes that member states have no incentive to address weaknesses in their system due, in part, to the ability of national authorities to reassign EU money when it comes to structural funds.

The commission is hoping to stem the problem in the 2014-2020 MFF by introducing stricter measures, such as holding back some of the money to ensure certain targets are met.

The EU’s annual budget represents just over 1 percent of the combined GNI of member states and 2 percent of their total public expenditure.

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