EC at “serious risk” of running out of money in 2012

Agreement between the European Commission and the European Parliament on the EU’s budget for 2012 has been swifter than usual, but commissioner Janusz Lewandowski has issued a warning that the 1.86% increase may leave Europe’s administrators without enough money.

Lewandowski (pictured), commissioner for Financial Programming and Budget, said the danger to the EC’s ability to meet its projected spending was down to a cycle of spending on “European projects”, which is expected to speed up rather than remain constant through the agreed budget period.

“The increase in payments on 2011 is 1.86%, amounting [in total] to €129bn. This is clearly an austerity budget as most member states are in the midst of a serious financial crisis,” Lewandowski said in a statement issed by the EC on the weekend.

“I also welcome the fact that, unlike last year, both arms of the budgetary authority have adopted the EU budget before the end of the conciliation procedure.

“However, I regret that they did not take into account the fact that, as we are reaching the end of the current financial period, EU funded projects across Europe gather speed, and that therefore the European Commission has to pay higher amounts to beneficiaries than at the beginning of the financial period.

“There is now a serious risk that the European Commission will run out of funds in the course of next year, and will therefore not be able to honour all its financial obligations towards beneficiaries of EU funds such as Europe’s regions and towns, businesses and scientists.

“When this happens, I count on both the Council and the European Parliament to honour their joint statement to the full, providing us with additional means to honour our commitments.”

Taxpayers across the EU are likely to want to know in further detail exactly what those “additional means” add up to in euros or any other currency used by member states.

This is particularly because although the budget agreed is for €129.1bn, the communiqué on the deal cites over €147bn “in committments”.

Lewandowski’s statement references the joint statement by the Commission and Parliament, which seems to leave taxpayers open to broad reaching additional spending.

That agreement allows for the Commission to pass an “amending budget” if it feels it does not have enough money in the areas of “competitiveness for growth and employment”, “cohesion for growth and employment”, “preservation and management of natural resources”, “citizenship, freedom, security and justice”, and “EU as a global player.”

 

 

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