30th May 2014

Conflict over changes in EU budget threatens several Eastern infrastructure projects

The European Commission has earlier proposed to the Council to adopt a modification of this year´s EU budget, more specifically to increase it by some €4.7 billion in order to be able to finance several projects co-financed by the EU contracted in the past programming period 2007-2013 which are still running. The modification must be approved by the Council and by the European Parliament and an “emergency buffer” foreseen in the budget should be used. Some €3.4 billion of the sum are large infrastructure projects, such as highways, bridges and railways in post-communist EU Member States, the rest should go to youth employment and other similar projects. Now, however, 8 Member States including Germany, the Netherlands, France or Austria are openly opposing the Commission proposal. According to the countries´ representatives, expected payments contracted in the previous multiannual financial framework are not an emergency situation for which the contingency margin of the budget is foreseen. Activating this emergency buffer of the budget would therefore be legally questionable. Moreover, it is not a last resort option, since other simpler procedures exist to cover such future commitments. According to an EC official, the Commission has enough cash to cover the commitments of this type in the following three months, the problems would arise after this period elapses and no increase is adopted. He added also that the EC is expecting some additional funding from fines and therefore not all €4.7 billion would be needed. The Member States representatives added, however, that the recent EP elections have shown the mood of the Europeans and an increase in EU spending would be clearly against the majority´s will.

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Members of the American Chamber of Commerce in the Czech Republic