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EU seeks extra EUR 11.2 bn

28 March 2013, 13:01 CET
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(BRUSSELS) - The EU needs another 11.2 billion euros in its 2013 budget to cover bills left unpaid from last year, the European Commission said Wednesday -- in a demand immediately shot down by Britain.

"This is a totally unacceptable request," Financial Secretary to the Treasury Greg Clark said in an unusually hard-hitting statement issued by the London government.

The amount sought is greater than the entire eurozone contribution to the Cyprus bailout, which Clark said was an "extraordinary" request "at a time when most EU member states are taking difficult decisions to reduce public spending."

EU Budget Commissioner Janusz Lewandowski said the figures "cannot come as a surprise" given that member states have been cutting back their contributions in recent years.

"This is creating a snowballing effect of unpaid claims transferred onto the following year," Lewandowski said in a statement.

Hiding one's head in the sand, however, "can only work for so long: postponing payment of a bill will not make it go away," he said.

The Commission proposal now goes to the 27 member states and the European Parliament for approval but is certain to face a rough ride with most of Europe facing another year of recession and record unemployment.

Recent negotiations over the EU's 2014-20 long-term budget were divisive as Britain pushed its peers for the first ever overall cut in spending, fixed eventually at 3.0 percent.

The Commission and Parliament argued for an increase, or at least no cut, so as to boost growth and jobs and lawmakers, who have the final say, have made clear they will not pass the 2014-20 proposal in its current form.

The annual budgets have proved equally difficult. European Parliament head Martin Schulz earlier this year said 16 billion euros were needed to cover the 2012 shortfall.

The EU budget for 2013 is based on planned spending of up to 143 billion euros but actual member state contributions were fixed at 132 billion euros, some 5.0 billion euros less than the Commission had asked for.

This reflects standard EU budget practice where spending is normally set higher than funding commitments on the assumption not all projects will go through.

Of the extra money, some 9.0 billion euros will be spent as Cohesion Funds on infrastructure and other projects to help bring newer and poorer member states into line with their more prosperous peers.

The remainder among other things will be for research, and education and training programmes such as Erasmus which supports students.


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