# C_2015423EN.01004801.xml

| 17.12.2015 | EN | Official Journal of the European Union | C 423/48 |
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17.12.2015

EN

Official Journal of the European Union

C 423/48

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Opinion of the European Committee of the Regions — The Draft EU Budget for 2016

(2015/C 423/09)

| Rapporteur: | Uno SILBERG (EE/EA), Member of Kose Rural Municipal Council |
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| Reference document: | Draft General Budget of the European Union for the financial year 2016 — General Introduction — General statement of revenue — General statement of revenue and expenditure by section
  COM(2015) 300 final |

Rapporteur:

Rapporteur:

Uno SILBERG (EE/EA), Member of Kose Rural Municipal Council

Reference document:

Reference document:

Draft General Budget of the European Union for the financial year 2016 — General Introduction — General statement of revenue — General statement of revenue and expenditure by section

COM(2015) 300 final

I.   GENERAL COMMENTS

GENERAL COMMENTS

THE EUROPEAN COMMITTEE OF THE REGIONS,

| 1. | notes that this is now the third own-initiative opinion on the EU’s annual budgetary procedure; the main item for consideration is Section III of the draft EU budget with the exception of administrative expenditure under heading V; |
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1.

notes that this is now the third own-initiative opinion on the EU’s annual budgetary procedure; the main item for consideration is Section III of the draft EU budget with the exception of administrative expenditure under heading V;

| 2. | stresses once again that the process of drawing up the annual EU budget — in line with the subsidiarity and proportionality principles — has both a direct and an indirect impact on the budgets of local and regional authorities. It is important in helping them to carry out their assigned tasks and to adapt to new challenges on the ground; |
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2.

stresses once again that the process of drawing up the annual EU budget — in line with the subsidiarity and proportionality principles — has both a direct and an indirect impact on the budgets of local and regional authorities. It is important in helping them to carry out their assigned tasks and to adapt to new challenges on the ground;

| 3. | underlines the crucial role of the EU budget in triggering investments, given that its leverage effect, complementing national and subnational private and public finances, contributes to competitiveness and economic, social and territorial cohesion in the EU; |
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3.

underlines the crucial role of the EU budget in triggering investments, given that its leverage effect, complementing national and subnational private and public finances, contributes to competitiveness and economic, social and territorial cohesion in the EU;

| 4. | notes that in times of difficult economic environment and scarce financial resources, emphasis should be put on better spending and performance of the EU budget rather than on absorption and compliance; welcomes the efforts of the EC to focus on concrete results achieved with higher EU added value based on better leverage of EU funds and more simplification efforts; |
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4.

notes that in times of difficult economic environment and scarce financial resources, emphasis should be put on better spending and performance of the EU budget rather than on absorption and compliance; welcomes the efforts of the EC to focus on concrete results achieved with higher EU added value based on better leverage of EU funds and more simplification efforts;

| 5. | welcomes the 2016 draft budget (DB) and its priorities, which are both in line with the new European Commission programme to boost the economy with investment in jobs, growth and knowledge and which facilitate a response to recent developments such as the migration crisis and the unstable situation in the EU neighbouring regions; |
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5.

welcomes the 2016 draft budget (DB) and its priorities, which are both in line with the new European Commission programme to boost the economy with investment in jobs, growth and knowledge and which facilitate a response to recent developments such as the migration crisis and the unstable situation in the EU neighbouring regions;

| 6. | criticizes that the considerable delay in the start of new programmes under the 2014-2020 MFF period owing to the late approval of the Operational Programmes will have negative implications on the territory of the LRAs; urges the European and national institutional level to take all necessary measures, together with regional and local authorities, in order to make good the delays in the implementation of the new EU funding; |
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6.

criticizes that the considerable delay in the start of new programmes under the 2014-2020 MFF period owing to the late approval of the Operational Programmes will have negative implications on the territory of the LRAs; urges the European and national institutional level to take all necessary measures, together with regional and local authorities, in order to make good the delays in the implementation of the new EU funding;

| 7. | notes that the EU draft budget for 2016 provides for EUR 153,5 billion in commitment appropriations (5,3 % down on 2015) and EUR 143,5 billion in payment appropriations (1,6 % increase on the 2015 budget); |
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7.

notes that the EU draft budget for 2016 provides for EUR 153,5 billion in commitment appropriations (5,3 % down on 2015) and EUR 143,5 billion in payment appropriations (1,6 % increase on the 2015 budget);

| 8. | draws attention to the fact that, while commitments are decreasing, the level of payments remains quite stable in real terms relative to 2015 and includes appropriations to gradually reduce the backlog of outstanding claims from the last budgetary period, which reached EUR 24,7 billion at the end of 2014; |
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8.

draws attention to the fact that, while commitments are decreasing, the level of payments remains quite stable in real terms relative to 2015 and includes appropriations to gradually reduce the backlog of outstanding claims from the last budgetary period, which reached EUR 24,7 billion at the end of 2014;

| 9. | welcomes the creation of a special payment plan as the result of an agreement, however is concerned that payment shortages will have a damaging effect on beneficiaries, particularly on LRAs, who are currently facing many economic and social challenges; also points out that the difference of EUR 10 billion between commitments and payments will not address the structural problem of the backlog of outstanding claims to be expected at the end of the programming period and laments the limited involvement of the CoR in the analytical process; |
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9.

welcomes the creation of a special payment plan as the result of an agreement, however is concerned that payment shortages will have a damaging effect on beneficiaries, particularly on LRAs, who are currently facing many economic and social challenges; also points out that the difference of EUR 10 billion between commitments and payments will not address the structural problem of the backlog of outstanding claims to be expected at the end of the programming period and laments the limited involvement of the CoR in the analytical process;

| 10. | wonders if interest rates should not be applied to the delays in the Commission’s payments to project managers; |
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10.

wonders if interest rates should not be applied to the delays in the Commission’s payments to project managers;

| 11. | emphasises the CoR’s readiness to contribute to the debate on the reform of the system of EU own resources: a thorough overhaul of the system is unavoidable, as its current shortcomings are causing gridlocks in budgetary negotiations and are at the very heart of the issue of outstanding payments. The only credible solution would be to introduce a proper own-resource mechanism for the EU; |
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11.

emphasises the CoR’s readiness to contribute to the debate on the reform of the system of EU own resources: a thorough overhaul of the system is unavoidable, as its current shortcomings are causing gridlocks in budgetary negotiations and are at the very heart of the issue of outstanding payments. The only credible solution would be to introduce a proper own-resource mechanism for the EU;

II.   POLICY RECOMMENDATIONS

POLICY RECOMMENDATIONS

Budgetary procedure

Budgetary procedure

| 12. | stresses that the EU budget has a direct impact on local and regional authorities, since they are beneficiaries and, at the same time, managing authorities of some programmes; |
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12.

stresses that the EU budget has a direct impact on local and regional authorities, since they are beneficiaries and, at the same time, managing authorities of some programmes;

| 13. | highlights that the EU budget has acquired even greater importance due to the economic and financial crisis and budgetary austerity, as it also supports the implementation of programmes and of public and private investment projects that would be difficult or impossible to finance during such crises and that also help to manage them; |
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13.

highlights that the EU budget has acquired even greater importance due to the economic and financial crisis and budgetary austerity, as it also supports the implementation of programmes and of public and private investment projects that would be difficult or impossible to finance during such crises and that also help to manage them;

| 14. | requests that the CoR attend interinstitutional meetings on the state of play and outlook for budgetary implementation in the current and future years, to be held based on the provisions of point 36 of the Annex to the multiannual financial framework (MFF) interinstitutional agreement; |
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14.

requests that the CoR attend interinstitutional meetings on the state of play and outlook for budgetary implementation in the current and future years, to be held based on the provisions of point 36 of the Annex to the multiannual financial framework (MFF) interinstitutional agreement;

| 15. | underlines the persistence of a too significant gap between commitment appropriations and the ceiling set by the MFF, in a situation of austerity measures and significant cuts in public and private investment, to finance measures aimed at job creation, fighting unemployment, tackling migration issues or reducing regional disparities; |
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15.

underlines the persistence of a too significant gap between commitment appropriations and the ceiling set by the MFF, in a situation of austerity measures and significant cuts in public and private investment, to finance measures aimed at job creation, fighting unemployment, tackling migration issues or reducing regional disparities;

| 16. | is particularly concerned about the weakness of the contingency reserve in the 2016 budget in particular with a view to the costs of managing the European migration crisis which, on the basis of the Commission’s plan to relocate 1 60  000 asylum seekers throughout the Union and an assistance of EUR 6  000 per person supported, should amount to at least EUR 1 billion; |
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16.

is particularly concerned about the weakness of the contingency reserve in the 2016 budget in particular with a view to the costs of managing the European migration crisis which, on the basis of the Commission’s plan to relocate 1 60  000 asylum seekers throughout the Union and an assistance of EUR 6  000 per person supported, should amount to at least EUR 1 billion;

Competitiveness for growth and employment

Competitiveness for growth and employment

| 17. | stresses that the EU’s global economic competitiveness must be improved by turning it into a smart and inclusive economy; therefore welcomes the fact that the draft budget under heading Ia provides for a 7,8 % increase in commitment appropriations compared with 2015, in order to increase competitiveness and create economic growth and jobs; |
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17.

stresses that the EU’s global economic competitiveness must be improved by turning it into a smart and inclusive economy; therefore welcomes the fact that the draft budget under heading Ia provides for a 7,8 % increase in commitment appropriations compared with 2015, in order to increase competitiveness and create economic growth and jobs;

| 18. | reinforces its recommendation already set out in its opinion on the draft budget for 2015 (1) that a specific budget line be created for providing technical assistance to the Adriatic and Ionian macroregion, as well as the Alpine macroregion, modelled on the one established in 2014 for the Baltic Sea and Danube macroregions, amounting to EUR 2,5 million in commitment and payment appropriations respectively; |
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18.

reinforces its recommendation already set out in its opinion on the draft budget for 2015 (1) that a specific budget line be created for providing technical assistance to the Adriatic and Ionian macroregion, as well as the Alpine macroregion, modelled on the one established in 2014 for the Baltic Sea and Danube macroregions, amounting to EUR 2,5 million in commitment and payment appropriations respectively;

1

Investment Plan and flexibility

Investment Plan and flexibility

| 19. | points out that the draft budget includes new elements compared to previous budgets, such as the EFSI, the global margin for commitments, as stipulated in Article 14 of the MFF, introduced for the first time, and provisions for the use of flexibility to finance new initiatives under heading III; |
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19.

points out that the draft budget includes new elements compared to previous budgets, such as the EFSI, the global margin for commitments, as stipulated in Article 14 of the MFF, introduced for the first time, and provisions for the use of flexibility to finance new initiatives under heading III;

COSME, Horizon 2020 and the Europe 2020 strategy

COSME, Horizon 2020 and the Europe 2020 strategy

| 20. | points out that COSME continues to be the EU’s only programme specially geared towards SMEs and improving competitiveness, and is concerned about the reduction in commitment appropriations compared with the draft budget for 2015; |
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20.

points out that COSME continues to be the EU’s only programme specially geared towards SMEs and improving competitiveness, and is concerned about the reduction in commitment appropriations compared with the draft budget for 2015;

| 21. | welcomes the fact that part of the global margin for commitments and unused margins will be used to finance the EFSI and that cuts in the Horizon 2020 and CEF programmes have been reduced, in line with the CoR’s recommendations; |
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21.

welcomes the fact that part of the global margin for commitments and unused margins will be used to finance the EFSI and that cuts in the Horizon 2020 and CEF programmes have been reduced, in line with the CoR’s recommendations;

| 22. | believes that a reduction in strategically significant research could have considerable negative repercussions in the long term and for this reason it opposes the proposed cut in commitment appropriations for the Horizon 2020 programme. There is hope, however, in that appropriations for payments for Horizon 2020 are set to increase by 10,45 %; |
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22.

believes that a reduction in strategically significant research could have considerable negative repercussions in the long term and for this reason it opposes the proposed cut in commitment appropriations for the Horizon 2020 programme. There is hope, however, in that appropriations for payments for Horizon 2020 are set to increase by 10,45 %;

| 23. | is pleased to note that the budget provides for more funding for cutting-edge research in the fields of food security, sustainable agriculture and the bioeconomy. The Commission’s initiative to mobilise additional funding through Horizon 2020 for research and innovation, drawing on the potential of the public and private sectors, is to be welcomed; |
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23.

is pleased to note that the budget provides for more funding for cutting-edge research in the fields of food security, sustainable agriculture and the bioeconomy. The Commission’s initiative to mobilise additional funding through Horizon 2020 for research and innovation, drawing on the potential of the public and private sectors, is to be welcomed;

| 24. | notes that many small and micro enterprises still cannot afford to undertake scientific research, which explains why take-up of the relevant funding is lower; |
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24.

notes that many small and micro enterprises still cannot afford to undertake scientific research, which explains why take-up of the relevant funding is lower;

| 25. | expresses concern over the 2,5 % reduction in commitment appropriations for the Europe 2020 strategy compared with 2015. Further reductions in commitment appropriations will make it harder to achieve the Europe 2020 targets; |
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25.

expresses concern over the 2,5 % reduction in commitment appropriations for the Europe 2020 strategy compared with 2015. Further reductions in commitment appropriations will make it harder to achieve the Europe 2020 targets;

Economic, social and territorial cohesion

Economic, social and territorial cohesion

| 26. | notes that an integrated budget model could be used to standardise EU Member States’ revenues, with more being invested in cooperation between Member States in the areas of research and development; this should be based on the needs of local businesses, which in turn will improve their competitiveness, regional development and people’s incomes; |
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26.

notes that an integrated budget model could be used to standardise EU Member States’ revenues, with more being invested in cooperation between Member States in the areas of research and development; this should be based on the needs of local businesses, which in turn will improve their competitiveness, regional development and people’s incomes;

| 27. | welcomes the fact that funding for programmes and measures due to start in 2016 has been approved and confirmed. The cohesion policy programmes (ESF, EAGF, ERF, Cohesion Fund) co-financed with Member States have been approved, and the commitment appropriations available because of delays in previous periods are now being used; at the same time, the Committee hopes that the Commission will make sure that full use of funding is made in these programmes; |
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27.

welcomes the fact that funding for programmes and measures due to start in 2016 has been approved and confirmed. The cohesion policy programmes (ESF, EAGF, ERF, Cohesion Fund) co-financed with Member States have been approved, and the commitment appropriations available because of delays in previous periods are now being used; at the same time, the Committee hopes that the Commission will make sure that full use of funding is made in these programmes;

| 28. | hopes that the Commission’s capacity to make payments improves on the whole, and that the target groups receive the investments they require on time; |
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28.

hopes that the Commission’s capacity to make payments improves on the whole, and that the target groups receive the investments they require on time;

| 29. | draws attention to the need for EU Member States to exercise budgetary discipline and calls on the European Commission to encourage the use of ESI funds for economic recovery centred on investments, fiscal consolidation and structural reforms; points out, in this connection, the important role of cohesion policy as the EU’s main investment policy aimed at reducing disparities between European regions by strengthening economic, social and territorial cohesion; |
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29.

draws attention to the need for EU Member States to exercise budgetary discipline and calls on the European Commission to encourage the use of ESI funds for economic recovery centred on investments, fiscal consolidation and structural reforms; points out, in this connection, the important role of cohesion policy as the EU’s main investment policy aimed at reducing disparities between European regions by strengthening economic, social and territorial cohesion;

| 30. | calls on the European Commission to adhere to its rules on financial reporting; underlines that currently the reporting obligations are administrative and time demanding; calls therefore for simplification of the reporting system; |
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30.

calls on the European Commission to adhere to its rules on financial reporting; underlines that currently the reporting obligations are administrative and time demanding; calls therefore for simplification of the reporting system;

Sustainable growth: natural resources

Sustainable growth: natural resources

| 31. | is concerned about the lack of sufficient funding under heading II to offset the loss of income of farmers in the EU Member States caused by the steep fall in the price of agricultural produce stemming from low purchase prices and from the abolishment of milk quotas, the current swine fever outbreak in Europe and Russian sanctions, and is disturbed by the lack of provision for (direct) assistance to ease these situations; |
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31.

is concerned about the lack of sufficient funding under heading II to offset the loss of income of farmers in the EU Member States caused by the steep fall in the price of agricultural produce stemming from low purchase prices and from the abolishment of milk quotas, the current swine fever outbreak in Europe and Russian sanctions, and is disturbed by the lack of provision for (direct) assistance to ease these situations;

| 32. | draws attention to the general introduction to the budget, which states that the funds for mitigating the effects of the Russian sanctions have been reduced under heading II, and does not agree with the suggestion that market conditions and prospects are favourable; |
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32.

draws attention to the general introduction to the budget, which states that the funds for mitigating the effects of the Russian sanctions have been reduced under heading II, and does not agree with the suggestion that market conditions and prospects are favourable;

| 33. | considers that the reserve arising from the margin between the commitment appropriations for the European Agricultural Guarantee Fund (EAGF) and the possible ceiling (approximately 1,7 % of commitments under the EAGF) is not explained clearly enough. Finalised action plans are expected on the ground that show when and in which circumstances the reserve can be used (for example, the outbreak of crises or for managing crisis-relief measures); |
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33.

considers that the reserve arising from the margin between the commitment appropriations for the European Agricultural Guarantee Fund (EAGF) and the possible ceiling (approximately 1,7 % of commitments under the EAGF) is not explained clearly enough. Finalised action plans are expected on the ground that show when and in which circumstances the reserve can be used (for example, the outbreak of crises or for managing crisis-relief measures);

| 34. | regrets the inadequacy of the means proposed by the European Commission for a reserve for the agricultural crisis and the insufficient increase of appropriations for the European Agricultural Fund for Rural Development (EAFRD) compared with the 2015 commitment appropriations; |
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34.

regrets the inadequacy of the means proposed by the European Commission for a reserve for the agricultural crisis and the insufficient increase of appropriations for the European Agricultural Fund for Rural Development (EAFRD) compared with the 2015 commitment appropriations;

| 35. | is concerned about the way the absorption rate for the 2007-13 programmes has developed and wonders if the assumptions made by the European Commission are not too optimistic; |
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35.

is concerned about the way the absorption rate for the 2007-13 programmes has developed and wonders if the assumptions made by the European Commission are not too optimistic;

| 36. | fears that in some cases Member States would seek speedy disbursement of funds in order not to lose committed amounts, thus increasing the risk of irregularities, which could lead to financial corrections, and that unabsorbed funds at the end of the programming period would result in automatic decommitment; |
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36.

fears that in some cases Member States would seek speedy disbursement of funds in order not to lose committed amounts, thus increasing the risk of irregularities, which could lead to financial corrections, and that unabsorbed funds at the end of the programming period would result in automatic decommitment;

| 37. | stresses that local and regional authorities, as the main beneficiaries, would pay the heaviest price for irregularities and decommitments, as their financial burden would increase; |
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37.

stresses that local and regional authorities, as the main beneficiaries, would pay the heaviest price for irregularities and decommitments, as their financial burden would increase;

| 38. | calls for better-quality financial planning at all levels and for an effort to avoid mechanical programming of commitment and payment appropriations by the European Commission; |
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38.

calls for better-quality financial planning at all levels and for an effort to avoid mechanical programming of commitment and payment appropriations by the European Commission;

Security and Citizenship

Security and Citizenship

| 39. | stresses the importance of the commitments made in the 2016 draft EU budget and calls for them to be further strengthened in response to recent developments that entail new, more cumbersome and onerous tasks, such as the migration crisis and new problematic situations in neighbouring regions; supports the application of the flexibility instrument in an appropriate form; fears, however, that the proposed increases might prove to be insufficient and that even more resources will be required; |
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39.

stresses the importance of the commitments made in the 2016 draft EU budget and calls for them to be further strengthened in response to recent developments that entail new, more cumbersome and onerous tasks, such as the migration crisis and new problematic situations in neighbouring regions; supports the application of the flexibility instrument in an appropriate form; fears, however, that the proposed increases might prove to be insufficient and that even more resources will be required;

Europe in the world

Europe in the world

| 40. | takes the view that the EU’s 2016 budget must demonstrate the EU’s determination to take on a more active and serious role internationally in combating the causes of the crisis, and to take into account local, regional and global interests and obligations; |
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40.

takes the view that the EU’s 2016 budget must demonstrate the EU’s determination to take on a more active and serious role internationally in combating the causes of the crisis, and to take into account local, regional and global interests and obligations;

Next steps

Next steps

| 41. | calls for earlier presentation and adoption of key legislative proposals for the next programming period (post-2020). In fact, delays in adoption of the multiannual financial framework as well as the Common Provisions Regulation and other ESIF-specific regulations, resulting from lengthy negotiations, have caused the 2014-20 programming period to get off to a slow start and are one of the main reasons for the rise in outstanding commitments (RAL). The Committee will strive to actively contribute to an early debate on the future of cohesion policy post-2020 and will submit its contribution to the discussions in due course; |
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41.

calls for earlier presentation and adoption of key legislative proposals for the next programming period (post-2020). In fact, delays in adoption of the multiannual financial framework as well as the Common Provisions Regulation and other ESIF-specific regulations, resulting from lengthy negotiations, have caused the 2014-20 programming period to get off to a slow start and are one of the main reasons for the rise in outstanding commitments (RAL). The Committee will strive to actively contribute to an early debate on the future of cohesion policy post-2020 and will submit its contribution to the discussions in due course;

| 42. | underlines the importance of the High Level Group on Own Resources and its ‘first assessment report’, which proposes that the issue of own resources be examined from as many perspectives as possible; |
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42.

underlines the importance of the High Level Group on Own Resources and its ‘first assessment report’, which proposes that the issue of own resources be examined from as many perspectives as possible;

| 43. | stresses its readiness to participate in the debate on reform of EU own resources. In the Committee’s view, a fundamental reform is absolutely essential, as the shortcomings of the current system have already led to problems in the budgetary negotiations, and even greater problems are likely, e.g. the negative impact of outstanding payments and arrears on the co-financing of investment projects at national, local and regional levels; |
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43.

stresses its readiness to participate in the debate on reform of EU own resources. In the Committee’s view, a fundamental reform is absolutely essential, as the shortcomings of the current system have already led to problems in the budgetary negotiations, and even greater problems are likely, e.g. the negative impact of outstanding payments and arrears on the co-financing of investment projects at national, local and regional levels;

| 44. | has opened a timely preliminary debate on the planning of measures for the next programming period post-2020 that have a direct and immediate impact on local and regional budgets and reflect changing needs, with the aim of avoiding the problems which arose during previous programming periods and particularly at the beginning of the 2014-2020 programming period. |
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44.

has opened a timely preliminary debate on the planning of measures for the next programming period post-2020 that have a direct and immediate impact on local and regional budgets and reflect changing needs, with the aim of avoiding the problems which arose during previous programming periods and particularly at the beginning of the 2014-2020 programming period.

Brussels, 14 October 2015.

The President of the European Committee of the Regions

Markku MARKKULA

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(1)  COR-2014-01750-00-00-AC.

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