Legislative Observatory
European Parliament
Please fill in this field to find a procedure

Mobilisation of the Contingency Margin in 2014

2014/2037(BUD)

The European Parliament adopted by 504 voted to 120, with 43 abstentions, a resolution on the proposal for a decision of the European Parliament and of the Council on mobilisation of the Contingency Margin, in accordance with point 14 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management.

Parliament recalled that the implementation of the MFF 2014-2020 started with a huge backlog in payments, with unpaid bills amounting to some EUR 23.4 billion at the end of 2013 for Cohesion policy only, and a level of outstanding commitments (RAL) reaching EUR 221.7 billion at the same date, i.e. EUR 41 billion above what was originally foreseen when the MFF 2007-2013 was agreed. It stated that this situation is unacceptable and requires urgent measures, having recourse to the flexibility mechanisms included in the MFF Regulation, with a view to not jeopardising the delivery of EU policies and programmes, as unanimously agreed in the MFF, but also to limiting the claims for interest on late payments and avoiding unduly increasing the economic exposure and vulnerability of beneficiaries of the Union budget.

Avoiding abnormal RAL: Parliament also recalled that, in the framework of the budgetary conciliation for 2014, the Parliament, the Council, and the Commission jointly agreed, in light of the need to ensure an orderly progression of payments and avoid any abnormal shift of the RAL onto the 2015 budget, to have recourse to the various flexibility mechanisms contained in the MFF Regulation, including the Contingency Margin. After having examined all other financial possibilities to react to unforeseen circumstances, the Commission proposed to mobilise the full amount of the Contingency Margin available to complement the payment appropriations in the general budget of the Union for the financial year 2014, above the payment ceiling.

Different interpretations: Parliament stated that the Council does not share Parliament's and Commission's interpretation that the EUR 350 million in payment appropriations mobilised in 2014 in respect of the Special Instruments provided for in the MFF Regulation should be counted outside the payments ceiling, thus leaving a margin of EUR 711 million to be exhausted before having recourse to the Contingency Margin. It stressed that the decision remains open as to whether and to what extent the amount of EUR 350 million should be offset against the MFF margins for payments for current or future financial years.

Deficit of payment appropriations: the resolution noted that it has been agreed, in the framework of the negotiations on the 2014-2015 budgets package, to mobilise the Contingency Margin for an amount of EUR 2 818.2 million plus EUR 350 million, i.e. EUR 3 168.2 million. However, Parliament stated that this mobilisation is not likely to sustainably address the recent payment shortages and the growing amount of outstanding commitments, but only to limit the increase in outstanding bills rolled over to the following year, which has grown by more than 50 % every year since 2010.

Mobilisation of the Contingency Margin: Parliament stipulated that the mobilisation of the Contingency Margin in 2014 does not entail any increase of the global ceiling for payment (EUR 908 billion, 2011 prices) of the MFF 2014-2020 since it is offset against the margins of future financial years.

In this regard, Parliament approved the mobilisation of the Contingency Margin for 2014 to provide the amount of EUR 350 million in payment appropriations, pending an agreement on payments for other special instruments.

Technically, this mobilisation is characterised by the following elements:

the Contingency Margin shall be used to provide the sum of EUR 3 168 233 715 in payment appropriations over and above the payment ceiling of the multiannual financial framework;

the sum of EUR 2 818 233 715 shall be offset in three instalments against the margins under the payment ceilings for the following years:

  • 2018: EUR 939 411 200
  • 2019: EUR 939 411 200
  • 2020: EUR 939 411 315.

The Commission is invited to present in a timely manner a proposal concerning the remaining amount of EUR 350 million.