EN Official Journal of the European Union CE 78/898

(2004/C 78 E/0949)

WRITTEN QUESTION E-4030/03

by Juan Naranjo Escobar (PPE-DE) to the Commission

(12 January 2004)

Subject: Under-utilisation of payment appropriations

According to the recent annual report of the Court of Auditors of the European Union, under the 2002 budget a total of EUR 85 144 was disbursed in payment appropriations, out of an available total of EUR 98 579. This represents a utilisation rate of 86,4 %.

This figure, together with those for the previous years (82,3 % for 2001, 87,9 % for 2000), confirms that the under-utilisation of payment appropriations is endemic and is the rule, not the exception. The mismatches appear primarily in category 2, one reason being that in the first years the programming stage consumes considerable time, resources and energy. Despite this, can the Commission state how it interprets the fact that under Internal Policies only 82,5 % of the payment appropriations available were executed in 2002, or that under External Actions only 86 % were utilised in 2001?

Answer given by Mrs Schreyer on behalf of the Commission

(20 February 2004)

The 2002 overall implementation rate of payments was indeed 86 %, exceeding the 2001 rate of 82 %.

The under-implementation amounted to some EUR 13,1 billion, comprising mainly:

— EUR 1,4 billion for Agriculture;

— EUR 8,1 billion for the Structural Funds;

— EUR 1,4 billion for Internal policies;

— EUR 0,5 billion for External actions; and

— EUR 0,9 billion for Pre-accession aid.

A detailed table providing the breakdown of the underimplementation of payments for:

— the budgetary appropriations;

— carryovers;

— third party appropriations;

is sent direct to the Honourable Member and to Parliament's Secretariat.

The main reason for the underimplementation of the structural funds was that for the 1994-1999 programmes the actual implementation was lower than forecast by the Member States, whereas for the new 2000-2006 programmes the implementation rate reached 91 % (compared to 70 % in 2001).

For Internal policies, about 50 % of the under-implementation of payments actually relate to third party appropriations. For reasons of budgetary principles, these contributions have to be entered into the budget together with the related commitments, even in cases where the payments will actually be made only in subsequent years, when the programmes or projects are implemented. These appropriations are carried over automatically to enable this. Without third party appropriations, the unused payments amounted to some EUR 700 million, and mainly concerned ‘Research and development’ due to delays in legal commitments and contractors' cost statements. Overall, it has to be emphasised that the implementation of payments increased in 2002 by a very substantial amount of almost EUR 1,3 billion, compared to 2001.

For External actions, the reason for the under-utilisation of payment appropriations was a combination of programmes committed late in the year (implying related payments in the subsequent year) and an increase in the payments' budget by the Parliament over the Commission's proposed PDB. The main affected programmes were for ‘Cooperation with the Balkan countries’, ‘Assistance to partner countries in eastern Europe and central Asia’, ‘Other Cooperation measures’, ‘Humanitarian aid’ and ‘Cooperation with developing Latin American countries’. Overall, the implementation of payments for External actions increased in 2002 by EUR 200 million, compared to 2001. The RAL has also been stabilised for external actions, compared to the annual increases in the past.

Generally, payments are demand driven. As the main rule, the Commission can only make a payment after the specific conditions for a payment have been met by the beneficiary, e.g., after a contract has been signed, a project has progressed or been finalised and/or the beneficiary has submitted the final accounts for the financial aid. By and large, these events are not under the Commission's control. A prudent financial management requires that the Commission scrupulously controls such pre-conditions for payments. As the budget for 2002 is mainly already established on the beginning of 2001, the forecasts on when certain payments will actually take place is therefore based on quite a large degree of uncertainties regarding external circumstances, implying a risk of over-budgeting, as was the case in 2002.