The European Commission will propose a “substantial” increase in payments in its draft 2013 EU budget, due out on 25 April, according to EU executive sources. The main justification for such a rise is that in the context of austerity, member states have been slashing the Commission’s assessment of payment needs. This in turn has created an “abnormal” shortage of payments in the 2011 EU budget to the tune of around €5-6 billion, which had to be rolled over to the current budget. In addition to that, the Commission estimates that the number of bills it receives from completed projects will increase a lot seeing as 2013 is the last year of the current multiannual financial framework (MFF).

MINUS 3.6 BN EURO EACH TIME

Budget Commissioner Janusz Lewandowski said, in January, that in the last three weeks of 2011 requests for reimbursement from member states amounted to €15 billion. Out of this, €11 billion is still outstanding, at least €5 billion or €6 billion higher than is customary each year. Lewandowski states that this “abnormal” shortage is the consequence of the Council, with the Parliament’s green light, compressing to the minimum the payment needs forecast by the Commission. For 2011 and 2012, the executive’s draft EU budget was shaved by the exact same amount: around €3.6 billion. This leaves the Commission “with very little choice than call for a substantial increase in payments,” explain the sources.

A “substantial” increase is unlikely to go down well with the Council. Indeed, in their guidelines to the 2013 EU budget, ministers called for payments and commitments to be “kept under strict control”. In light of the economic crisis, “consolidation efforts are requested from member states, notably by the Union,” read the guidelines. There are some member states that will back, up to a limit, the Commission’s request for accrued payments next year. Indeed, during the Ecofin Council, in late February, Poland, Romania, Latvia and Lithuania stressed that bills had to be paid in order to preserve the EU’s credibility.

The EU executive’s biggest potential ally to defend its proposed increase should be the European Parliament. That will depend on whether MEPs follow Committee on Budgets (BUDG) Chair Alain Lamassoure’s (EPP, France) lead and put their money where their mouth is. Lamassoure recognises that in the last two years, the Council set the overall level of payments, which Parliament was forced to rubber-stamp. “If I do this a third time in a row I am no longer credible,” he warns. He is fully aware, nonetheless, that due to the sovereign debt crisis payments will have to remain limited. The EP thus leaves room, in its guidelines for the 2013 EU budget, for cuts but requests that they be politicised. In case the Council requests “artificial cuts,” Parliament asks the former institution to “clearly and publicly identify and justify which of the EU’s political priorities or projects it believes could be delayed or dropped altogether,” reads the EP report.