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Budgets Committee backs solidarity aid to central European flood victims, despite funding method

Budget ? 31-03-2011 - 16:51

Committee: Budgets

Plans to release €182.4 million in EU Solidarity Fund aid to help repair the flood damage in Poland, Slovakia, the Czech Republic, Hungary, Croatia and Romania in 2010 were approved by the Budgets Committee on Thursday, despite MEPs' strong reservations about the funding method chosen by the Council. The direct cost of the damage is estimated at about €5.5 billion.

MEPs disapproved of the source of the funding, a "negative reserve", as proposed by the Council of Ministers, as a "once-only solution" but nonetheless voted for the Council proposal, because they felt that they could not let flood victims also become victims of a dispute between the Council and Parliament.

Background to the conflict

The Solidarity Fund contains no money as such. When natural disasters occur, aid funding must come from other budget lines, via a procedure called "redeployment". At the start of any given year, it is difficult to assess for which budget lines money might remain available at the end of the year. Budgets Commissioner Janusz Lewandowski therefore proposed that "fresh money" be added to the budget by means of an amending budget, a procedure agreed during last December's budget negotiations.

However, some Member States objected to the Commission proposal on the grounds that it would affect total payments for 2011 and mustered a qualified majority to change the Commission's proposal so as to use a so-called "negative reserve". In the committee's view, this procedure merely provides a "once-only" solution, since the maximum available for this reserve is €200 million. Moreover, it is considered contrary to an existing agreement on meeting unforeseen, urgent needs.

Payments versus commitments

In last year's budget negotiations, some Member States focused on payments. They disagreed with the Commission's estimates (5.8% increase) and managed to reduce the increase in payments for the 2011 budget to 2.91%. MEPs feared that this could prevent the Commission from being able to meet its payment obligations. By way of compromise, the Council signed a joint declaration, stating that in the event of unforeseen costs or emergencies, funds would be added by means of amending budgets.

MEPs felt that Thursday's decision is contrary to this declaration. Budgets Committee Chair Alain Lamassoure (EPP, FR), warned that this behaviour would make it hard to accept any further written declarations by Member States during the discussions over the 2012 budget and the 2014-2020 financial perspectives.

Mr Lamassoure also underlined that Member States should focus not on payments, but on commitments. "This was common practice until a few years ago. If you commit, you have to pay. I tried to make this point in yesterday's trilogue with the Commission and the Hungarian Presidency, but they reacted with mute, autistic silence. Payments are obligatory expenditure, a result of previous commitments. If we continue to focus on that, we get to an absurd, impossible situation", he warned.

In the chair: Alain Lamassoure (EPP, FR)

REF. : 20110331IPR16703