IP/05/571

Brussels, 18 May 2005

Unspent EU funding record low in 2004

Only 1% of the EU budget remained unspent in 2004, setting a new record low for unused funding of €1 190 million. Thanks to improved implementation of the EU budget but also due to higher than expected revenue the total budgetary surplus for 2004 amounted to € 2 737 million. This is the lowest level seen since 1997. The Commission has therefore approved a Provisional Draft Amending Budget to include the surplus into this year’s budget, reducing the contributions required by Member States for 2005.

Dalia Grybauskaité, European Commissioner for Financial Programming and Budget said: “Better management of the budget and the Financial Regulation, in force since 2003, is now showing results.”

Only 1% of the budget remained unused at the end of 2004 – this represents an exceptional level of implementation. Besides this unused funding extra revenue came in, making the overall surplus 2.6%. In 2003 the surplus amounted to 5.9% of the budget, or €5 483 million, and in 2002 to 7.8% or €7 421million.

Unspent funding accounts for €1 190 million of the surplus. For agriculture, the sum not spent amounted to €331 million out of €43 997 million (0.75%), while for structural funding the figure was €231 million out of a total €34 451 million (0.7%). Even in external action, an area where needs are difficult to forecast precisely (for example, when responding to natural disasters), unused funding was limited to around 4% of the total allowance.

Revenue to the budget was significantly higher than expected, accounting for €1 597 million of the surplus. By far the highest share (€1 166 million) of the extra funds came from contributions from third-parties (such as the European Economic Area states) for participation in EU programmes.

Money not spent in 2004 will be rolled-over to 2005, reducing the sums payable by Member States this year. Member States that will benefit significantly from reduced budget contributions as a result of the surplus include Germany (€-576 million), the UK (€-485 million), France (€-433 million) and Italy (€-359 million). Further large downward adjustments are due for Germany and the UK in the next amending budget, to be proposed by the Commission at the end of the month.

Background

The EU treaties do not allow for a budget deficit, and require the budget to be balanced each year. The annual surplus, which the Commission seeks to reduce to a minimum, is entered into the budget for the following year, reducing revenue required from Member States.

A further Provisional Draft Amending Budget will be proposed by the Commission at the end of May, and will recalculate Member State’s budget contributions for 2005, taking into account both the surplus and revised economic data. The combined amending budgets should reduce total contributions further.

The next Provisional Draft Amending Budget will adjust Member State contributions in light of revised forecasts for GNI, VAT and customs duties, updated amounts for the UK correction, and the surplus from the Guarantee Fund for external actions.

Financing and surplus by Member State in million €