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European Commission

[Check Against Delivery]

Máire GEOGHEGAN-QUINN

European Commissioner for Research, Innovation and Science

Debate on the Horizon 2020 structural shortage of payment

European Parliament

Strasbourg, 16 September 2014

Mr President,

I would like to thank you very much for organising the debate in the plenary session today on the Horizon 2020 structural shortage of payment. Parliament's decision to include a debate on this issue is very timely, just after the debate you have had this afternoon in which my colleague Commissioner Dominik participated.

Since 2011, Research and Innovation programmes have suffered from recurrent and accumulating lack of payment appropriations, and I will return to this in more detail in a few minutes.

The situation has deteriorated under Horizon 2020 since the payment ceilings foreseen by the Multi-Annual Financial Framework (MFF) 2014-2020 are tight. This situation has obliged the Commission to put in place drastic measures in order to meet its contractual obligations and to avoid payment delays.

Two key measures have been adopted already in 2013: (1) a reduction of the average pre-financing rates for all research grants; (2) the postponement of calls for proposal closure dates thus spreading the payment needs to later years. The implementation of these drastic measures has reduced payments by up to EUR 1.5 billion in Research programmes for the year 2014.

However, we should not forget that these payment appropriations needs are in reality only being pushed back to 2015 and beyond. Indeed, if current trends continue, such unmet accumulated payment needs would result in over 40% of Horizon 2020 commitments remaining outstanding in 2020 and without proper payment coverage.

However, these measures will not suffice anymore to avoid payment delays if the requested payment appropriations are not met. In short, Mr President, the approach of putting off to the future has reached its limits.

Concretely, for 2014, and despite the implementation of these measures, an additional EUR 230 million requested through Draft Amending Budget 3/2014 is urgently needed before the end of the year for the Research DGs to avoid payment delays.

In addition to this already challenging situation, I must signal the "sword of Damocles" that is hanging over Horizon 2020 in the Budget 2015: the proposed 10% cut on the Commission's Draft Budget for research payment appropriations, representing a EUR 1 billion budget decrease for the Research Budget, would lead to a situation where research DGs could fail in their contractual obligations to thousands of research beneficiaries. In practical terms, as Commissioner Dominik already mentioned to you during his intervention today, around 600 collaborative projects under Horizon 2020 would be affected, involving more than 7000 participations, of which around 1400 are SMEs.

I believe it is important to clarify one particular issue with regard to this proposed 10% cut in funding. Some would seek to obscure this fact by presenting the situation on Heading 1a as some sort of a huge "increase" for R&D spending, by comparison with 2014.

What such a narrative fails to mention is that 2014 constituted a highly atypical year in terms of the scale of the payment appropriations budget for research and innovation. Indeed, in 2014, due to the phasing in of Horizon 2020, some 15% less is budgeted by comparison with 2013.

The "increased spending" narrative neglects two important factors:

  • the step increase of commitment profile in the last years of FP7, as FP7 was back-loaded;

  • And secondly, the overall limited availability of payments with which we are faced.

Thus, 2014 cannot be used as a valid benchmark for judging the evolution of the budget in 2015. In fact, 60% of our spending in 2014 and 2015 is actually legacy-related payments from the 7th Framework Programme, meaning that the full rollout of Horizon 2020 is de facto being pushed ever further to the future, due to the lack of payment appropriations.

In short, an outcome which provided for such a cut in the spending originally proposed by the Commission for 2015 would seriously put into question the reputation of the Union as a reliable funder of research. This is a dramatic situation for a flagship policy that is intended to support jobs, growth and competitiveness.

It is also highly regrettable in the current economic situation, given our collective search for growth enhancing measures, and knowing that research and innovation lie at the heart of new growth and jobs. Such artificially low investment in research will also negatively impact on other initiatives, such as the Digital Agenda, the energy technologies plan and our climate change policies.

Such a large cut in 2015 would also be at odds with repeated affirmations in support of the Europe 2020 growth and jobs agenda, most recently articulated through the "Strategic Agenda for the Union in Times of Change". It goes without saying therefore that achieving a new boost for jobs, growth and investment cannot be achieved if we continue to reduce planned investments in R&I.

We count on the active support from you, the members of the European Parliament, in addressing this problem, by adopting without modification both the Draft Amending Budget 3/2014 and the Draft Budget 2015 as presented by the Commission


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