EU budget runs dry on youth, education and research

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This article is part of our special report Jobs and Growth.

The European Commission will present a proposal for a supplementary budget for 2012, probably on 23 October, as EU coffers ran empty for programmes that include priority areas such as education, youth and research.

French MEP Alain Lamassoure (European People’s Party), who chairs the Parliament’s Budget Committee, said money for the European Social Fund ran out since the beginning of October. He said the fund helped millions of Europeans to find jobs or improve their career skills.

Erasmus, known as one of the most successful student exchange programmes in the world, has run out of funds, Lammassoure said, according to an Agence France-Presse report.

Fabrizio Fiorilli, spokesperson to Budget Commissioner Janusz Lewandowski, said today (3 October) that the EU executive is not at all surprised by these statements.

When the EU budget for 2012 was adopted in November 2011, Fiorilli said, Lewandowski pointed out that the Parliament and the Council had agreed on a budget much lower than the one proposed by the Commission.

In April, the Commission defended plans to increase the bloc's spending for 2012 by 4.9%, arguing that the proposal struck a balance between austerity and the need to boost growth. The proposed 2012 budget was of €132.7 billion, but the one that was eventually adopted was €129.1 billion.

“I remember Commissioner Lewandowski: There won’t be enough cash. That’s for sure,” Fiorilli said in response to a question from EURACTIV.

Lewandowski’s spokesperson said the European Parliament and member states had probably realised that the lower budget would not be enough, because they added a sentence inviting the Commission to submit a supplementary budget if need be. Countries are expected to fund the supplementary budget from the multi-annual budget for 2007-2013 with contributions proportional to their GDP.

“It’s been two or three years since the Parliament and the Council cut our proposals. It’s been two or three years we’ve been saying – we’re going to have problems,” he added.

Top up needed

Fiorilli said the Commission had cobbled together as much as it could and transferred funds to areas where money was needed, but this was possible only to the amount of €420 million.

The proposal for amending the budget will be much higher, he said. However, he did not venture any figures, explaining that the Commission was still in the process of assessing the needs.

Lamassoure said the budget gap is €10 billion. If the gap is not filled, the losses incurred by France would be of €400 million, €600 million for Greece, €900 million for Spain, and of €150 million to €200 million for the UK, the country at the forefront of the budget-saving drive.

The catch appears to be that countries would find it difficult to say no to the Commission’s proposal to top up the budget for programmes that benefit jobs and education. As Fiorilli explained, the annual budget is for reimbursing countries that already made payments to local authorities or to small and medium enterprises, and that now wait to be reimbursed by the EU.

Another paradox appears to be that the budget has run dry precisely in areas where EU leaders committed to boost, like education, research and youth, in order to promote growth.

“Not to accept the amended budget would be not accepting growth,” said Commission spokesperson Olivier Bailly.

Karina Ufert, Chair of the European Students’ Union (ESU), said:

“We urge the European Commission to make haste with their so called Global Transfer Proposal and solve the current financial shortcomings of the European Social Fund by using money from underspent European Union funds.”

“On top of this we need a long-term solution that protects funding for all next generations of Erasmus students. We call upon the EU member states to recognise the importance of European mobility programmes while deciding on the next multiannual financial framework for 2014-2020,” she added.

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