EU lawmakers avert payment crisis

The European Parliament approved an additional 2.7-billion-euro (3.7 billion dollar) injection into the European Union’s 2013 budget on Thursday, thus preventing the bloc from running out of money in the coming weeks.

The European Commission, the bloc’s executive, had warned that it would no longer be able to make payments from November if member states did not provide the extra funding. The shortfall is due to lower-than-expected revenue from value-added tax and import duties.

Most EU money flows back into the bloc’s 28 countries, for instance as agricultural subsidies or support for poorer regions.

Legislators stressed that member-states still had to agree to allowing the commission to spend a further 3.9 billion euros this year, in order to cover financial pledges already made.

“Today’s approval of the draft amending budget does not eliminate the need for fresh money to pay the bills already submitted by the member states,” said EU lawmaker Giovanni La Via, who oversaw the file.

Lawmakers demanded assurances from the bloc’s 28 countries that they would indeed agree to the extra 3.9 billion euros. Diplomats have warned that Britain, for one, has reservations.

The bloc of member states would “stick to its promises and deliver,” said Lithuanian Deputy Finance Minister Algimantas Rimkunas, whose country holds the EU’s rotating presidency.

The 3.9 billion euros would be approved by October 30, he said, when EU ministers for European affairs are to hold a special meeting for that purpose.

EU Budget Commissioner said the agreement was a “partial solution,” adding, “Various deep problems in the implementation of 2013 budget are result of the under budgeting for several years. It is not a surprise.” “We cannot muddle through from one budget crisis to another,” said EU Parliament President Martin Schulz. “The EU needs a realistic and adequate budget which will guarantee that the EU can operate efficiently,” he added.

EU lawmakers and member states are locked in an ongoing fight over the bloc’s budgets, as the parliament insists that commitments must be met, while the bloc’s governments are trying to cut spending in the aftermath of the crisis.