20 October 2014

Euractiv: EP Budgets Committee Chair: 'EU debt goes against treaties'

As member states present their 2015 budgets to the European Commission for examination, serious questions are being raised over the alarming state of the EU budget. President of the European Parliamentary Committee on Budgets Jean Arthuis says the Union's debts will reach €30 billion by the end of 2014.

The EU’s financial difficulties are a result of debts that have accumulated over several years. The European Parliament is due to adopt the EU budget for 2015 at the plenary session in Strasbourg on 22 October, so what is the current situation?

The European Union is still generating debt, which goes against the treaties. When the Council and the European Parliament set budgetary commitments, they must have accepted that one day they will have to honour those commitments.

The real issue is that we are creating a "snowball effect" of accumulated debt, to the point where the EU's debts were worth €11 billion at the end of 2011, 16 billion at the end of 2012, 23 billion at the end of 2013, and could reach €30 billion by the end of 2014. The debts just keep on growing. We have to put an end to this.

How can such an accumulation of unpaid bills exist when the treaties formally prohibit the EU from generating debt? Does this mean there are structural problems in the way the European Union's budget is established?

The multiannual financial framework, which has scheduled the EU's spending for 2014-2020, was adopted despite a €52 billion discrepancy between spending commitments and payments. €960 billion of commitment authorisations were scheduled, compared to only €908 billion of payment appropriations, which means that some bills will have to be deferred.

€220 billion is still awaiting validation from 2013.  This situation must be rectified.

What can be done to limit the accumulation of debt?

To face up to the 2014 situation, the European Commission is planning to increase payment appropriations by €4 billion. This was approved by the EP’s Committee on Budgets and will be put to the vote in the plenary on 22 October.

As far as the 2015 budget is concerned, the plan is to re-establish the level of payment appropriations initially proposed by the European Commission.

I think it is important to deal with the unpaid bills from 2014 at the same time as the budget for 2015, but to prioritise 2014 in order to stabilise the debt.

Full interview on Euractiv

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