Brussels, 23 October 2012
Amending EU budget for Europe's students, scientists, NGOs', businesses and regions
The Commission has adopted today an amending budget to enable it to meet its legal obligations towards beneficiaries of EU funds. This is in line with the joint statement the Council and the European parliament adopted the day the EU budget for 2012 was adopted inviting the Commission to request additional money "in an amending budget if the appropriations entered in the 2012 budget are insufficient to cover expenditure".
Having now a more complete picture of budget implementation in 2012, the Commission estimates that an extra 9.0 billion is needed to cover the incoming bills and respect contractual and legal obligations, mainly in areas essential for growth and jobs in Europe.
The President of the European Commission José Manuel Barroso stated: "This is not about the Commission asking for more money but about Member States honouring the commitments they have made: to provide uninterrupted funding to students under the Erasmus programme or to poorer regions through the Cohesion Funds. These payments are essential to revive growth and create jobs throughout the EU."
"I have repeatedly warned that constant cuts in the proposed budget will eventually create a big problem, says EU Commissioner for financial programming and budget Janusz Lewandowski. This time has come. Our situation does not allow us to deliver on our agreed commitments. The Council and the European Parliament must now take their responsibilities since they voted an EU budget below its needs. Since the shortages of funds are mostly in the fields of education, science and research, employment and regional development, I am sure that they will not contradict their previous statements that Europe needs to invest in growth; I am confident they will honour their joint statement to the full and ensure a swift approval of this updated budget. This is no amending budget for EU institutions; it is one for Europe's students, scientists, NGOs, businesses and others for whom the EU budget makes a difference every day."
The Erasmus programme needs an additional EUR 90 million and is at risk of having to substantially reduce the number of places offered to students or to cut their level of grants; this will obviously hit students from disadvantaged backgrounds the hardest.
For research programmes the Commission needs an extra EUR 423 million partly in order to pay in time and avoid interests on delayed payments. Other part of this additional funding is to cover pre-financing payments on projects for which agreements have already been signed. Not respecting the deadlines would mean postponing the start of projects essential for Europe´s future competitiveness in the globalised world.
The highest amounts though are requested for Europe's regions under cohesion policy and rural development: around EUR 8.3 billion supplementary payments. All these projects improve the lives of EU citizens by giving them better skills, better job prospects or by creating transport and energy infrastructures.
The impact of this amending budget on the contributions of EU Member States will however be mitigated due to an increase of income to the EU budget from other sources: EUR 3.1 billion of additional revenue mainly from fines in the field of competition policy and other penalties. The net effect for Member States therefore amounts to EUR 5.9 billion.
Implementation of the budget at EU level is different than at national level because the EU budget is essentially an operational budget with very limited administrative expenditure (5.8%). Yearly budgets are a translation of the current multiannual financial framework (2007-2013). Multiannual programmes take several years to reach their cruising speed and achieve full implementation towards the end of the period. It is therefore no surprise that EU funded projects across Europe have gathered speed and now the contracts signed have to be paid. Despite this the last EU budgets have been adopted at levels well below Commission's estimates. Furthermore EUR 5 billion of payment requests came at the very end of last year and could not be covered in 2011. This sum had to be rolled over as an additional burden on an already reduced 2012 budget.