2014 budget: break the vicious circle of unpaid bills
Unpaid bills from 2012 and 2013 should not pollute next year's budget with illegal debt, says Parliament in a resolution adopted on Wednesday. MEPs insist that legitimate invoices from last year and this year must be settled as soon as possible so that 2014, the first year under the new budget framework, can start with a clean slate.
Unpaid bills have piled up over the past few years as the member states have
refused to provide enough money to pay both incoming bills and outstanding
bills from previous years. This has created a vicious circle in which unpaid
bills have been rolled over to the following year. As the annual budgets do not
include money to pay old bills from previous years, the debt has grown bigger
Regional aid most problematic
In 2012, bills amounting to €16.2 billion went unpaid, out of total claims from the member states of €50.6 billion for cohesion spending. Once these old bills are settled, only €28.9 billion will be left for payments in 2013. This will inevitably lead to another payments shortfall and without a solution this will immediately jeopardize the 2014 programmes.
By the end of 2012, the level of outstanding commitments had reached the unprecedented level of € 217.3 billion and it risks rising again this year.
Fresh money for old bills and monthly reports on payments
MEPs deplore the Council's regular practice of making "horizontal cuts" to money intended for payments in the annual budget and see it as the main cause of this de facto budget deficit. They urge the Commission to submit a draft amending budget to cover last year's bills by the end of this month at the latest to ensure that the budget negotiations for next year are not compromised. This was actually agreed during last year's negotiations on the 2013 budget.
To prevent bill shocks at the end of the year, MEPs suggest that the Commission report monthly to Parliament and Council on progress with payments to each country from the big funds.
Investing in growth and jobs
The EP wants the Commission to indicate clearly how its proposed budget will contribute to the Growth and Jobs Compact agreed in June 2012. It says the budget should not be seen as an additional burden but rather as a tool to boost investment. The ability of the EU budget to trigger economic growth, competitiveness and job creation is more important than ever in times of economic difficulty, it stresses.
The text adopted on Wednesday by 532 votes to 86, with 67 abstentions, is Parliament's first input to the 2014 budget procedure. The next step is a formal proposal from the Commission. The final budget is decided jointly by member states and MEPs, within the limits of the long-term budget framework.