Payments backlog in recent EU budgets: Lessons learnt and outlook

10-11-2015

Since 2011, the EU has experienced an issue of increasing levels of payment backlog at year-end. The problem has turned out to be a recurring one, especially pressing during annual budget negotiations, and difficult to resolve with ad-hoc preventive action. The situation has deteriorated over the years and at the end of 2014 the payment backlog was estimated at some €26 billion, around half of which was classified by the European Commission as 'abnormal'. While the bulk of the backlog came under the heading 1b 'Cohesion for growth and jobs', other policy areas were also affected, such as the Erasmus and research programmes, the European Neighbourhood Instrument and humanitarian aid. The problem interlocks both technical aspects of budgetary management and a political dimension, with fundamental questions on the architecture of EU public finances, including the system of own resources and the flexibility of the Multiannual Financial Framework. The situation should significantly improve by the end of 2016 thanks to a series of interinstitutional initiatives, strongly supported by the EP. However, the future outlook from 2017 remains to be thoroughly assessed.

Since 2011, the EU has experienced an issue of increasing levels of payment backlog at year-end. The problem has turned out to be a recurring one, especially pressing during annual budget negotiations, and difficult to resolve with ad-hoc preventive action. The situation has deteriorated over the years and at the end of 2014 the payment backlog was estimated at some €26 billion, around half of which was classified by the European Commission as 'abnormal'. While the bulk of the backlog came under the heading 1b 'Cohesion for growth and jobs', other policy areas were also affected, such as the Erasmus and research programmes, the European Neighbourhood Instrument and humanitarian aid. The problem interlocks both technical aspects of budgetary management and a political dimension, with fundamental questions on the architecture of EU public finances, including the system of own resources and the flexibility of the Multiannual Financial Framework. The situation should significantly improve by the end of 2016 thanks to a series of interinstitutional initiatives, strongly supported by the EP. However, the future outlook from 2017 remains to be thoroughly assessed.