Brussels, 2 October 2014
Letter from President Barroso to the Italian Presidency of the EU Council on the EU budget payment shortages
"We are all working hard to deliver stronger growth and better employment prospects for our citizens. While the public sector alone cannot deliver the growth that we need, well targeted public funding can help to stimulate growth. That is why we worked so hard together to agree on a modern, future oriented budget for the EU when we agreed last year on the multi annual financial framework (MFF). This is not just a technical or purely budgetary exercise: it is a question of the credibility of the political decisions taken by the European Council.
When we agreed that the EU budget should be used to invest in growth, jobs and competitiveness and to reinforce the Union's role in the global arena, we agreed on a total level of payments and a yearly profile and made a concerted effort to direct expenditure towards the Union's highest priorities. At a time we are discussing new ways to promote investment in Europe it would be wise to look first at the instruments that have already been approved, the MFF being the most significant of them.
It was clear at the time that it would be challenging to reconcile our ambitions with a smaller budget. This is why my agreement was conditional on being able to exploit the flexibility in the budget so as to make full use of the agreed amounts. The Commission has consistently made clear that the overall payments ceiling defined in the 2014-2020 MFF is a minimum to implement the agreed policies, and that it is only possible to implement it if we make maximum use of the available flexibility instruments provided for in the MFF Regulation. We are not asking for more than was unanimously agreed by the Member States with the consent of the European Parliament.
Unless there is a top level political decision to return to what was agreed in the MFF, the budget negotiations this year will result in levels of funding that are below those agreed in December 2013. The consequences of such an outcome would mean that the EU would not be able to honour its past commitments within the agreed deadlines. The Commission would not be able to launch all of the new programmes or respond as you would wish to the pressing crises in our neighbourhood and beyond.
The solution to this problem does not lie in the Commission. We have worked hard to increase the level of implementation of the budget. The Commission's proposals for the 2015 draft budget and for amending the 2014 budget reflect a responsible and realistic approach. They are fully in line with the Treaty obligation for the three institutions to ensure that the financial means are made available to allow the Union to fulfil its legal obligations.
The Commission has proposed an increase of EUR 4.7 billion in payment appropriations in draft amending budget 3/2014 in order to face the payment shortages experienced in several programmes and to respond to a number of unforeseen circumstances. Some of them are linked to negative developments, such as the instability in our neighbourhood. Others are a response to positive developments, such as the higher than expected pace of implementation in cohesion policy.
Developments on the revenue side have helped to alleviate the situation in 2014 and should facilitate agreement on the amending budget. A large amount of fines stemming from the enforcement of competition policy is accruing to the EU budget this year. If these additional resources are used to pay the increase of EUR 4.7 billion in payment appropriations in draft amending budget 3/2014 the net cost to Member States will be small.
For 2015, after a rigorous assessment of needs, the Commission has proposed a draft budget making full use of the MFF payments ceiling. The Commission's proposals are the bare minimum needed to arrest the growth of outstanding commitments and provide the means to address the obligations stemming from previous years. The requested payment appropriations are also a necessary condition to kick-start the new investments in infrastructure, innovation, growth and jobs that Europe needs. The Commission is not seeking "money for Brussels" – the money will all be spent in the Member States or, to a lesser extent, in partner countries.
We will not be able to meet our shared objectives if Member States do not stand by the levels of payment that they have already agreed together. That is why I am calling on the Council to show the leadership that is necessary to deliver in the coming weeks a budgetary decision that respects our political agreement that concluded the 2014-2020 MFF negotiations."