Budgets Committee wants negotiations on 2011 budget surplus

Unlike the Council, Parliament's Budgets Committee unanimously wants to use part of the remainder of the 2011 budget, the so-called "budget surplus", to prevent looming budget shortfalls in 2012. The Council, on the other hand, wants to deduct last year's leftovers from the member states' contributions to the 2012 budget.

At the initiative of Francesca Balzani (S&D, IT), the MEP who steered the 2012 budget through Parliament, the Budgets Committee proposes to use last year's €0.73 billion underspend to make payments needed in the fields of research (€338 million) and cohesion (€391 million). According to Ms Balzani, the surplus is there, "not because the money was not needed, but because the rules did not allow for a much-needed quick transfer from one budget line to another at the very end of last year".

Research projects delayed

Budgets Committee MEPs stress that all available indicators point to a shortage of payments in many areas, inter alia because for 2012, Parliament and Council agreed on a budget that was €3 billion less than the Commission thought necessary.  Especially in the area of research, projects risk a standstill as there is no money to pay the initial amounts due upon signing new contracts. As a result, projects in areas like health research and bio- and nanotechnology, need to be delayed.

Priority yes, money no!

Ms Balzani's proposal was also triggered by the Council's recent refusal to reshuffle €485 million within the 2012 budget to fund over 200 research projects, even though research and innovation is considered top priority by the member states. Instead, and very much against Parliament's wishes, the Council reduced the Commission proposal by two thirds (i.e. €338 million).

The surplus

At €1.49 billion, the budget surplus in 2012 is historically low. By comparison; in 2011 it was three times as high, at € 4.54 billion. The surplus is the sum of the underspend in 2011 (€0.73 billion), fines and interest on late payments (€0.67 billion) and exchange rate differences (€97 million).

What to do with the "budget surplus" will be a key issue in the budget trialogue on 9 July.

In the chair: Jutta Haug (S&D, DE)