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European Commission - Statement

Statement by Kristalina Georgieva, Vice-President of the European Commission for Budget and Human Resources, on the political agreement on 2015 budget proposal

Brussels, 09 December 2014

An agreement has been reached on the EU budget for 2015, and certain amendments to the 2014 budget, including a substantial reinforcement of the level of payments in the 2014 budget. Representatives of the European Parliament and the Council of the European Union concluded talks in trilogue format yesterday evening, coming to a deal after the European Commission had put forward a new draft budget proposal for 2015 on Friday 28 November 2014. The budget deal strikes the right balance between budget discipline on the one hand and promoting growth oriented expenditure on the other hand.

Welcoming the agreement, Vice-President of the European Commission Kristalina Georgieva said: "This agreement paves the way for a sound 2015 budget, supporting investment in competitiveness, growth and jobs. We can also pay outstanding bills with the 2014 budget using windfall income from fines, at no additional financial burden to national treasuries. I trust that the European Parliament and the EU Member States will approve the deal quickly, so we can get down to work."

Following political approval by Member States' Ambassadors this morning, the agreement on the package of the 2015 budget and the 2014 amending budgets must now be formally adopted by the Council, and then goes to the European Parliament for debate and approval in plenary.

Background

What are the numbers?

[Note that comparisons with 2014 are including amending budgets]

Budget 2015

  • €145.321 billion in commitments (€95.5 million more than the latest Commission proposal for 2015, €2.631 billion greater than 2014 budget).
  • €141.214 billion in payments (€123.0 million less than the latest Commission proposal for 2015, €2.179 billion greater than 2014 budget).
  • Payments for Heading 1a (Competitiveness for growth and jobs), 4 (Global Europe) and the Convergence objective of Cohesion reflect the political priority attached to these policy areas. Convergence is protected entirely from payments cuts. Heading 1a receives payment appropriations of €15.798 billion (€35.1 million less than the original Commission proposal for 2015, €3.935 billion greater than 2014 budget) and Heading 4 receives €7.423 billion (€5.5 million less than the original Commission proposal for 2015, €581.6 million greater than 2014 budget).
  • Payment appropriations of €127 million for the EU Solidarity Fund and €440 million for the Youth Employment initiative are moved from 2014 to 2015 budget. The €440 million in payment appropriations for the Youth Employment initiative, which remains unused in 2014, is therefore used in 2014 to pay outstanding bills.

Amending budgets 2014

  • €50 million in additional commitments.
  • €3.530 billion in additional payments, stemming from the mobilisation of the Contingency Margin (see below) and the unallocated margin of 2014.
  • The payments in the amending budgets will be covered through unexpected revenue from fines, mostly competition fines.

Mobilisation of the Contingency Margin in 2014

The Contingency Margin allows for payments to be made above the ceiling in a specific year if exceptional circumstances arise. These payment appropriations must be drawn from later years and overall the ceilings cannot be exceeded in the seven year budgetary cycle agreed in 2013.

Given that the unprecedented reimbursement claims from Member States from structural and cohesion funds policy had to be addressed, as well as the difficult situation in Ukraine, payments could not be covered within the original payment ceiling for 2014. Thus the Contingency Margin is used as a last resort. This is the first time this new instrument (agreed last year) is used.

The Contingency Margin is used in 2014 to provide the sum of €3.168 billion, which includes €350 million pending a decision on the use of other special instruments (see below).

Focus on competitiveness, growth and jobs in 2015

  • Heading 1a is almost completely protected in terms of payments as compared with the Commission's original 2015 budget proposal.
  • There is a focus on innovation, education, SMEs and youth with an additional €81.5 million in commitments.
  • The agreement launches new and extends existing pilot projects and preparatory actions, a total of 59 with €57.1 million in commitment appropriations in areas such as research and innovation, transport, jobs and social security, SMEs and more.

Special instruments

The European Parliament and the Council were not yet able to find agreement on whether or not the "Special Instruments" (EU solidarity fund, Emergency Aid Reserve, EU Globalisation Adjustment Fund and Flexibility Instrument) should be allowed to be mobilised over and above the MFF ceilings for payments. In order to adopt the budget package now it was therefore decided for the time being to include €350 million in payment appropriations covering other special instruments in addition to the contingency margin. Discussions on the other special instruments could then continue with a view to adjusting the decisions on the mobilisation of the Contingency Margin once agreement on the treatment of the other special instruments is reached.

Payment plan

The three Institutions have agreed to work on reducing the level of unpaid bills at year-end, in particular in cohesion policy. The Commission will present, along with the joint conclusions on Budget 2015, a most up-to-date forecast of the level of unpaid bills by end 2014; the Commission will update these figures and provide alternative scenarios in March 2015 when a global picture of the level of unpaid bills at the end of 2014, for the main policy areas, will be available.

The three institutions will endeavour to agree on a maximum target level of unpaid bills which can be considered sustainable. The three institutions will as of 2015 implement a plan to reduce the level of unpaid bills in relation to the implementation of the 2007-2013 budget. The Commission will therefore in its draft budget every year provide a document showing the level of unpaid bills and making a suggestion to reduce this level, for which the three institutions agree to consider any possible means.

STATEMENT/14/2503

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