WIREDGOV

Member states should act "responsibly" and not make any false budget cuts or cause unnecessary deadlocks by disagreeing over calculation methods during the 2013 budget negotiations, budget committee MEPs said on Wednesday. They also underlined that the budget must focus on growth and jobs.

The member states should "refrain from making artificial cuts" and if they do want to make genuine cuts, they must "clearly and publicly identify and justify which of the EU programmes or projects should be delayed or dropped altogether", say MEPs in the mandate they adopted on Wednesday for Parliament's team of negotiators for the budget talks on 9 July.

Budget negotiations in the past few years have been dominated by disagreements over how to calculate the level of payments in the budget and MEPs this year urge member states with doubts about the Commission's estimates to clarify them as quickly as possible to avoid blocking an agreement, as happened last year.

MEPs criticise the Commission's and the Member States' proposal to freeze the commitments in order to reduce the number of bills that cannot be paid on time (known as "outstanding commitments" or "RAL" for "Reste à Liquider"):

"Freezing commitment appropriations cannot be considered an acceptable strategy to keep the level of outstanding commitments under control. Commitments are crucial for determining the EU's political priorities and for ensuring that the investment needed to boost growth, competitiveness and employment will be made. A reduction below the inflation rate would be an unacceptable proposal, far away from the real need to recover and exit from the crisis.", says Italian MEP Giovanni La Via (EPP), responsible for Parliament's work on the 2013 budget.

The budgets committee also deplores the Danish presidency's failure to show up for a meeting called to tackle the looming shortfall in funds for this year and to discuss how to calculate the payments. Solving these issues would help smooth the way for the negotiations on the content and size of the 2013 budget, it says.

Focus on growth and jobs

The committee wants the budget to focus on measures to trigger growth and jobs. It is pleased that the biggest increases in commitments are concentrated in budget heading 1a "competitiveness for growth and employment". However, they do not like the Commission's proposal to finance the nuclear research programme ITER exclusively from the Framework Programme 7 (FP7) research programme.

They are also displeased that a shortfall in funds for cohesion policy has meant that the Commission has been unable to meet legitimate payment claims in full. As a result, member states are receiving EU funds too late, threatening the continuation of current projects and the start of new ones.

The Commission proposed that the total budget for 2013 (in commitments) should be €151 billion, two per cent more than in 2012. However, it puts the total level of payments needed at €138 billion (up 6.8 per cent from 2012). The increase is mainly due to big increases in payments for cohesion policy and research. MEPs underline that payment appropriations proposed by the Commission are based on the estimates made by Member States themselves and call on the Commission to verify with Member States that their estimated demands for payment increases are accurate and realistic.

Background: difference between commitments and payments

Each budget line has two figures; one for commitments and one for payments. In short, the commitment figure is the political figure, showing where the EU wants to spend its money, whereas the payments figure is basically a technical estimate deriving from the commitments. Everything that the EU commits itself to do must, sooner or later, be paid for. Payments result directly from commitments. If the EU cuts payments in a given year, it is not cutting costs but simply removing them from that year's budget. Cutting payments merely postpones the costs to a later year, and the bills must still be paid. The Commission calculates an estimate of the payments needed in a given year, based on the commitments for the same year and previous years.

Next steps

The full House will vote on the mandate at its July session (from 2 to 5 July). The trilogue takes place on 9 July and will be followed by the first Council vote, scheduled for 26 July. MEPs will vote in committee in early October and in plenary on 23 October. If there is no agreement at first reading the conciliation period will be from 24 October to 13 November, aiming at adoption of the final budget during the 19-22 November plenary.