18th July 2014

EU-funded projects at risk again as bidget grows thin

Due to budget tightening, the COmmission and the European Parliament are warning, the EU-funded projects are slowly getting into trouble. As in 2011 and 2012, payments that needed to be made in 2013 were transfered into 2014 budget. These amount to €23 billion. As a result, the 2014 budget is almost empty only halfway through the fiscal year. If no corrections are made and the praxis of postponing due payments into next fiscal year continues, EU will soon be unable to fund programs such as Erasmus+ or humanitarian aid in Syria, the Commision and the MEPs warn. They urged the Council, therefore, to stop tightening the payments budget of the EU and to not allow the overdue payments to snawball into the next fiscal year 2015. Amendments to the budget were also presented, amounting to €4.7 billion. These serve only to bridge the gap in payments and would cost the Member States virtually nothing. The Commission warns also, that even though it does not possess the finances, it must meet its financial committments, which drags the EU budget in de facto deficit – illegal under EU law. This undermines the EU´s credibility, the Commission states. With regard to the present budgetary situation, the Commission and the MEPs called unacceptable the draft budget approved by the Council´s COREPER. COREPER amended the Commission´s proposal by reducing it by €2.1 billion. However, the Commission´s proposal was already intended as the absolute minimum, therefore any cuts undermine the budget as a whole.

The MEPs will discuss the budget after the Council´s formal position in September.

For more, click here and here.

Members of the American Chamber of Commerce in the Czech Republic