12 November 2014

European Commission: EU budget - Rule change to give more flexibility on exceptional adjustments to national contributions

This comes after the current automatic system had this year led to a demand for exceptionally large additional payments from some countries. The extension would kick in, if additional payment requests are over a certain threshold: for an individual Member State, if they are requested to pay more than twice their regular monthly payment to the EU budget; for all countries, if the total requested adjustment is more than half of the total monthly contribution of all Member States.

Commission Vice-President Kristalina Georgieva said: "The Commission has acted very quickly to make a proposal that would avoid imposing this kind of burden on national treasuries this year and in the future. We have included flexibility in extraordinary circumstances. However, the rules must remain precise in order to safeguard the EU's financial soundness, which is important for our citizens, businesses, universities, farmers and others right across the EU."

Part of the proposed rule change is that when requesting delayed payments, the Member States must provide a binding schedule for those payments. They will then be required to pay interest if they do not respect the agreed schedule.

The annual, automatic adjustment this year was unprecedented in size as it factored in re-calculations of Gross National Income (GNI) dating as far back as 1995. Following a discussion among the finance ministers on 7 November, the Commission has moved quickly to draft a change in the rules. The proposal made today will be sent to EU Member States for approval, and also requires an opinion from the European Parliament and the Court of Auditors.

The Commission has also recognised the need to look at timing of delivery of information on these adjustments, how this information can be made more easily accessible, and how to encourage more transparency when it comes to data related to GNI.

Full press release

European Commission: The EU budget's "own resources" and the Commission's proposed changes

This fact sheet aims to provide a comprehensive yet accessible summary of the proposal for a targeted and limited amendment of the part of the "own resources" legislation.

Why does the Commission propose to amend the own resource decision?

This year's adjustment exercise showed that under exceptional circumstances this exercise, though automatic and based on rules agreed by all parties, can trigger unexpectedly much higher GNI contributions for some Member States which have to be paid in a very short period of time. As a result, the Council invited the Commission to come forward with a proposal for a targeted and limited amendment to those implementing rules (Council Regulation No 1150/2000) to take account of the exceptional circumstances The Commission proposes to introduce a new paragraph (7a) in article 10 of the implementing regulation.

What does the proposed change consist of?

The proposal introduces the possibility for Member States, under certain conditions, to ask to postpone, until 1 September next year at the latest, the payment of additional amounts resulting from the adjustment exercise. It takes into account both the impact of the annual adjustment on any individual Member State, and equal treatment of all Member States should the global impact (on all Member States put together) of the adjustment be exceptionally high. This provision can be activated in two concrete situations:

• If as a result of the annual adjustment, the increase of that member state's VAT- and GNI- contribution exceeds 2/12 of its yearly contribution to the EU budget (both for its share of VAT resource and GNI contribution)
• If the result of the annual VAT and GNI adjustment results in a global (for all Member States put together) amount exceeding half of one twelfth of the amount due by all Member States together as own resources based on VAT and GNI

Full fact sheet

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