EU states cough up 4bn euros to cover 2013 budget shortfall

Brussels (AFP) - EU member states agreed Wednesday to raise the ceiling for the bloc's 2013 budget by 3.9 billion euros ($5.4 billion) in order to avoid a freeze on the payment of bills.

The increase was demanded by the European Parliament as a condition for its approval of the hotly contested EU multi-year budget for 2014-20, the Council of European Union governments said.

The agreement includes some 400 million euros in solidarity funds due to be returned to Germany, Austria, the Czech Republic and Romania to cover the cost of extensive flooding earlier this year and fires in 2012.

The 28 EU member states will have to find the extra 3.9 billion euros, according to their relative size and economic weight as in the overall budget.

However, the flood and fire monies will have to come from "redeployment of unspent funds," an EU source told AFP.

The Parliament has still to approve this latest alteration, with a vote expected next month, although the changes for 2013 funding ought to assuage the concerns of MEPs who were threatening to delay approval of the 2014-20 budget.

The 3.9 billion euros are part of a total 11.2 billion euros in additional funding which was agreed earlier this year to cover this year's shortfall in the 2007-13 budget.

In practice, the additional funding approval has come too late to put the money to use, the European Commission said.

Accordingly, some bills will have to be held back for payment, it added.