Financial supervisory architecture facing possible budget constraints after the EP rejected EU budget for 2011
18 November 2010
All newly-decided policies will encounter budgetary problems, since there was no (or little) money for them in the 2010 budget. This concerns for example the new Financial Supervisory Bodies, the External Action Service and the nuclear fusion research project (ITER).
As long as there is no 2011 budget, the budget of the previous year will be used, with the annual sums divided up in 12 monthly parts. The implications of this are severe, but not apocalyptic. The provisional twelfths system involves monthly budgets per category which are exactly one twelfth of the budget of 2010. This system does not take into account that payments are higher in certain months than in others. The solution to that problem lies in Art. 315 of the Treaty, which that says "on the basis of a Commission proposal, the Council, by qualified majority, can decide to add the necessary funds". The European Parliament then needs to approve or reduce this amount within 30 days.
Especially in the field of agriculture, this will be urgent. Member States have advanced direct payments to farmers to an amount of €30 billion and the European Commission has to compensate them in January 2011. On the basis of provisional twelfths, the Commission will only have €6 billion available – so the Member States and the Commission have a problem.
© European Parliament
