Commissioner guarantees that €908bn EU budget will be ‘fully spent’

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EXCLUSIVE / Following the political agreement reached yesterday (27 June) on the EU's 2014-2020 spending plan, Budget Commissioner Janusz Lewandowski told EURACTIV he guarantees that conditions have been put in place so that the €908 billion agreed for payments over the seven-year period will be fully spent.

Lewandowski spoke to EURACTIV in an exclusive interview hours after the political agreement snatched  by the leaders of the three institutions just before the beginning of the summit.

>> Read: EU 2014-2020 budget agreed. This time for real?

The commissioner provided explanations in a ‘memo’ circulated by the leaders of the three EU lawmaking institutions – the European Commission, Parliament and Council – which brokered the agreement yesterday (27 June).

First, more flexibility is introduced for using unspent money from one year to the next. Previously, it was envisaged that a total of no more than €24 billion would be allowed for yearly transfers, with a €3 billion cap for the first three years. The cap was then to be increased by €1 billion annually, reaching €8 billion for the year 2020. Now it’s the other way around: there is no cap for the first three years, and a cap of €7 billion in 2018, €9 billion in 2019 and €10 billion in 2020.

Lewandowski explained that this was necessary because in the draft 2014 budget, less than 10% of the money was earmarked for new projects, and the rest was paying for old obligations. With the flexibility introduced under the new agreement, he said it was possible to make “full use” of the €908 billion overall expenditure ceiling that was agreed at the 8 February EU summit.

>> Read: EU budget hawks succeed in €960-billion cap

Lewandowski said it was difficult to put a figure on how much money would be mobilised additionally, but said that in the previous 2009-2014 budget, €60 billion would be returned to member state coffers because of unspent money, or unused margins.

“Margins” are the difference between the authorised yearly expenditure ceilings as agreed in the EU budget, and the actual expenditures, very much like the difference between the monthly spending limit on a credit card and its owner’s actual monthly credit card bill, the Commissioner explained.

Another novelty relates to the youth employment initiative, whose €6 billion funds will be "frontloaded" in 2014 and 2015 instead of the budget's full seven-year period running until 2020. To avoid that the fund runs dry, another €2 billion will be made available after 2015, until a wider budget review takes place the following year. A similar effort would be made on research, Erasmus and SMEs, he explained.

The budget commissioner helped decipher the memo's cryptic text on the budget review, scheduled for 2016. “According to today’s political agreement the mid-term review will be obligatory. The other important element of the review is that the Commission will come with legislative proposals in 2016. So we are committed to make legislative proposals, we can investigate all the changes necessary for implementing the budget.”

He announced that the next budget after 2020 would be spread over five years to correspond with the EU institutions' mandate, and not seven years as is the case now. “The political cycles of the institutions are of five years, so in the future we shall go for five-year multi-annual financial frameworks,” he said.

Asked about the amending budget for 2013, he said the Council had committed to take a formal decision for a first tranche of €7.3 billion no later than 9 July, but that he expected that a decision could be taken earlier. The European Parliament is expected to vote on the 2014-2020 budget on 4 July.

Lewandowski said nobody challenged the disbursement of €7.3 billion, and appeared equally certain that the next tranche of €3.9 billion, scheduled in the autumn, would be disbursed as well.

“If something is arriving legitimate, verified, before the end of October, we need to pay. I’m sure we will have to present in autumn our update of bills, and as it was the case last year, member states cannot contest it. And I’m sure this is at least €3.9 billion,” he said.

Asked if he thought the Union had obtained a good deal with this budget, he said it was “the best possible under the exceptional, difficult circumstances”.

To Lewandowski, the present negotiations could be compared to those that took place in 2005-2006, when he chaired the European Parliament’s budget committee. “Now I can compare this exercise with the present one, which is like extreme sports, really, under these conditions,” he said.

The Polish commissioner also said it was very important to adopt the separate pieces of legislation to implement the EU budget before the autumn, when EU countries are busy with their national annual budgets.

To read the full text of the interview please click here.

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