EU’s Barroso calls for truce amid bankruptcy threat

The European Commission President Jose Manuel Barroso has called for budget truce between the bloc’s governments and the European Parliament, saying the EU is running out of money.

Barroso’s appeal came on Wednesday during a debate at the European Parliament in the French city Strasbourg.

“Please let’s avoid the insolvency that would not be in the interest of the image of the European institutions,” said Barroso.

The president told the members of parliament that the commission would not be able to make payments from November if it is not provided with an extra 2.7-billion-euro (USD 3.7-billion).

“Without approval of these draft amending budgets on time, the European Commission will not be able to pay the bills we’re supposed to pay,” said Barroso.

The extra funding is needed to cover a shortfall after receiving less than predicted revenue from EU import duties.

The parliament’s budget committee has approved the additional funding, but some lawmakers have demanded that their final vote be made conditional as they have concerns over a 3.9-billion-euro budget supplement as well.

The nearly 4-billion-euro budget supplement is required in order to balance a deficit in the 2013 budget and the supplement is a condition for the European Parliament to approve the spending plans for 2014-20.

The issue has triggered tension between the European Parliament and EU governments, with Barroso saying there is a “lack of confidence” between the two sides.

The European Parliament is set to vote on Thursday on the extra 2.7 billion euros in funding. The assembly is also scheduled to hold a special meeting on October 30 regarding the 3.9-billion-euro budget supplement.

Europe is struggling with an economic crisis that erupted in early 2008, leaving millions unemployed and in financial distress.

The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered massive demonstrations in many European countries.