Why do we need to transfer unused EU budget commitments from 2014?
The Multiannual Financial Framework (MFF) establishes ceilings for budget expenditure in different policy areas for a period of seven years. The current MFF started in January 2014. The EU budget has to comply every year with the ceilings for each main policy area (called heading). If some programmes cannot be adopted in one year the amounts corresponding to that year are in general lost. However the MFF Regulation foresees the transfer of the 2014 commitments under shared management in case of delays in the adoption of the legal bases or programmes in order not to lose them.
The very late agreement on the 2014-2020 MFF Regulation (in December 2013) meant that the legal bases for every single EU programme over the same period were in turn adopted late. For the programmes under shared management, an additional programming procedure is required, which was in turn delayed. Therefore quite a large number of programmes could not be adopted before the end of 2014. As foreseen by the MFF Regulation (Article 19) the corresponding funds shall be transferred to the following years.
Today's proposal for a revision of the Multiannual Financial Framework regulation, accompanied by a draft amending budget, is based on that provision of the MFF Regulation for the transfer of the unused 2014 commitments. Similar provisions were already in place and applied for the two previous programing periods (in 2001 for the 2000-2006 period and in 2008 for the 2007-2013 period).
How will this transfer work in practice?
The 2014 unallocated amounts are made available again for the same funds and to the same Member States by revising the MFF Regulation. The ceiling for commitment appropriations in 2014 will be decreased and the ceilings for commitment appropriations for the following year or years increased accordingly. According to the rules, the revision of the MFF Regulation has to be approved before 1 May 2015.
Most of the unused funds will be transferred to 2015 (the European Regional Development Fund (ERDF), the European Social Fund (ESF) CF, the Cohesion Fund (CF), and the European Maritime and Fisheries Fund (EMFF)). There are small ERDF amounts for cross-border cooperation with neighbouring countries transferred to 2017. In the case of the European Agricultural Fund for Rural Development (EAFRD), the corresponding commitments will be transferred to 2015 and 2016. The Asylum, Migration and Integration Fund (AMIF) and the Internal Security Fund (ISF) commitments will be transferred to 2015 to 2017.
Couldn't the Commission have foreseen this situation during the 2015 budget negotiations?
With the delays incurred in the agreement of the MFF, it was predictable that adopting the new programmes would be under a very tight schedule. The Commission worked hard to shorten internal procedures and thus extend deadlines to the extent possible.
Efforts were made until the very last day of 2014, so that as many programmes as possible could be approved or at least ready for adoption. This also means that the exact amount to be transferred to the 2015 Budget under this mechanism could not be foreseen in due time for the budget negotiations. In any event, a revision of the MFF is needed before the Budget can be amended accordingly.
Will this transfer increase the difference between the commitment and payment ceilings, affecting the ability of the Commission to pay bills?
The impact on the ratio between commitment and payment appropriations during the MFF period will not change. The backlog of payments stems from the pre-2014 commitments – i.e. it is independent of this procedure and is now expected to decrease rapidly as the pre-2014 programmes will be closed in 2016/2017.
When will the remaining programmes be adopted?
If all other conditions are met the programmes subject to the transfer of 2014 commitments can be adopted once the revision of the MFF and the Draft Amending Budget have been agreed by Parliament and Council under the respective legislative procedures. According to the provisions of the MFF Regulation, the revision shall be adopted before 1 May 2015.
What happens next?
The proposal goes now to the European Parliament and the Council. The revision of the MFF will require a unanimous decision of the Council after having obtained the consent of the European Parliament. This decision has to be made before 1 May 2015. The Budgetary Authority will also have to approve the accompanying draft amending budget proposing the transferring of funds not committed in 2014.