Monday

23rd Apr 2018

EU budget running low on funds, commission warns again

  • The European Commission has warned that it needs €4.7 billion to avoid another cash-flow crisis (Photo: snorski)

The European Commission has warned that it is running out of money again in the latest stand-off between the EU institutions over its unpaid bills.

The EU executive says that the bloc’s budget faces payment gaps worth €4.7 billion covering research and employment programmes, cohesion policy, and costs arising from the refugee crisis in Ukraine and Syria.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

An autumn cash-flow crisis for the commission has become a perennial fixture in the EU calendar.

After repeatedly warnings from the EU executive that flagship programmes such as the Erasmus student-exchange scheme and the European Social Fund were within weeks of running out of money, the EU institutions agreed to amending budgets worth €6 billion in 2012 and €11.2 billion in 2013.

Speaking during a European Parliament debate on the issue on Wednesday (16 July), commissioner Androulla Vassiliou remarked that the process made the bloc’s budgetary process “almost unintelligible and undermines the EU’s credibility”.

Vassiliou blamed governments for having only authorised “an artificially low level of payments.. on the understanding that a supplementary budget would be needed later in the year.”

This time Vassiliou told MEPs that governments would not be required to dip into their pockets to stump up the €4.7 billion, with the money collected from fines for breaching EU competition law, and surpluses in other budget headings.

But the commission still needs to permission of governments to do this, to avoid the funds being distributed back to national capitals.

For their part, most MEPs want governments to plug the gap to avoid the process repeating itself, yet again, next year.

“At the start of the parliamentary cycle we need to stop this slippage, to keep our finances in order,” said Liberal deputy Jean Arthuis, the new chair of the Budgets committee.

This year is the first year of the bloc’s new seven year budget cycle, and should be the last where the EU has to cover overhanging bills from the previous cycle.

But with overall spending already set to be 3 percent lower than in the 2007-2013 cycle, the commission says it will require “maximum flexibility” to shift funds between different budget headings if is to avoid running out of money.

Cash-strapped governments are reluctant to stump up extra money, and are set to cut the commission’s draft proposal for the 2015 budget by €2.1 billion when they meet next in September.

Italian minister Benedetto Della Vedova, representing governments, commented that “the interest of the council is that no member state should run the risk of having to pay extra bills,” adding that “we have to respect the commitments entered into but we have to ensure that the EU budget reflects the overall economic situation.”

Jonathan Ashworth, an MEP for the conservative ECR group, warned that without an overhaul of EU spending “an ever deeper payments crisis is inevitable”.

Negotiators strike deal on €960bn EU budget

EU negotiators are on the brink of formalising a €960bn deal on the next seven year EU budget, after a tentative deal on Wednesday. But key MEPs are already saying the deal is insufficient.

Cameron slapped with new €2bn EU bill

The EU has told the UK it must pay a new €2.1 billion bill by 1 December, in grist for the mill of Cameron's eurosceptic adversaries at home.

EU innovation institute under fire by MEPs

MEPs have taken aim at the ballooning costs of a nuclear fusion reactor in France and lack of financial transparency on the EU's innovation institute.

Feature

Hungary activists defiant after 'Soros Mercenaries' attack

Immediately after Orban's landslide victory in April, a list of so-called 'Soros mercenaries' was published by pro-government media. Those on it - mostly human rights defenders, activists and Orban critics - are now anxious but vow to continue.

Secrecy of VW fraud report 'unacceptable', says MEP

Finnish MEP Heidi Hautala won a trailblazing court case two decades ago for the right of EU citizens to receive 'partial access' to documents. Now she says it is "outrageous" the European Investment Bank is refusing to release Volkswagen documents.

News in Brief

  1. Commission will 'not shy away' from Malta killing repercussions
  2. EU Commission opens probe on Alitalia state loan
  3. Paris suspect given 20-year sentence for Brussels shoot-out
  4. Merkel and Pena Nieto praise EU-Mexico trade agreement
  5. Nahles elected new leader of Germany's SPD
  6. Report: EU budget to refocus on South
  7. Audit office: Brexit 'divorce' bill could be billions higher
  8. MEPs urge better protection for journalists

Stakeholders' Highlights

  1. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  2. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  3. Mission of China to the EUProgress on China-EU Cooperation
  4. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  5. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  6. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  7. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  8. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  9. UNICEFCalls for the Protection of Children in the Gaza Strip
  10. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  11. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  12. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations

Latest News

  1. Hungary activists defiant after 'Soros Mercenaries' attack
  2. European Commission proposes whistleblower protection law
  3. Secrecy of VW fraud report 'unacceptable', says MEP
  4. 'Strong suspicion' of corruption in Council of Europe assembly
  5. France tightens immigration law, sparking division
  6. ECJ ruling set to end 10-year 'mouth tobacco' lobbying saga
  7. Whistleblowers, Syria and digital revolution This WEEK
  8. MEP friendship groups offer 'backdoor' for pariah regimes