UN: EU Statement on Improving the Financial Situation of the United Nations

UN: EU Statement on Improving the Financial Situation of the United Nations

UN 61st Session; V Committee, Agenda Item 119: Improving the Financial Situation of the United Nations

New York, 9 November 2006

Statement by H.E. Ms. Kirsti Lintonen, Ambassador, Permanent Representative of Finland to the United Nations, on beahlf of the European Union

 Mr. Chairman,

I have the honour to speak on behalf of the European Union.

The Acceding Countries Bulgaria and Romania, the Candidate Countries Turkey, Croatia* and the former Yugoslav Republic of Macedonia*, the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, Montenegro, Serbia, and the EFTA countries Iceland, Liechtenstein and Norway, members of the European Economic Area, as well as Ukraine and the Republic of Moldova align themselves with this declaration.

On behalf of the EU, I wish to thank the Controller Mr. Warren Sach for the twice-yearly briefings on the financial situation of the United Nations. This information provides us with a useful insight into the finances of the UN and more importantly, it clearly indicates whether we, as Member States, have met our collective responsibility towards the financial well-being of the Organisation. Unfortunately, this has not been the case. We wish to underline that it is the responsibility of all member states to pay their contributions in full and on time.

Mr. Chairman,

Although the financial indicators for this year include some signs of improvement, such as an increase in the projected cash available for the Capital Master Plan, there are reasons for concern. Firstly, the position of the regular budget is uncertain. As indicated in the financial presentation, 122 Member States have paid in full their regular budget assessments by the end of October this year. This leaves 70 Member States owing a total of $661 million, with over 95 per cent being owed by four States.

Secondly, the total amount outstanding for peacekeeping operations at the end of October was over $2.5 billion. Such a situation has a negative impact on the effectiveness of peacekeeping operations. Meanwhile the Organisation’s outstanding obligations to Member States that contribute troops and equipment to peacekeeping operations are expected to increase up to more than one billion USD. This is due to that same delay in the receipt of assessed contributions.

Thus we find ourselves in a vicious cycle year after year. The Organisation needs full and timely payments in order to plan and execute efficiently the programmes we have mandated. When contributions are not paid, or are so late that the UN faces severe cash flow difficulties, this affects the Organisation’s ability to perform. Peacekeeping operations will suffer and Troop Contributing Countries will continue to face delayed reimbursements unless the payment pattern of member states changes. It is for this reason that the EU stresses the need for member states to pay in full and on time, noting yet again that the largest part of the outstanding dues are owed by only a handful of countries.

Mr. Chairman,

The EU notes, however, the comment made by the Controller on the unpredictable nature of the demand for peacekeeping activities and how, on this basis, it could perhaps be more difficult for Member States to keep current with their payments.

Peacekeeping has indeed a different financial period than the other accounts, assessments are issued separately for each operation and they are issued for different periods throughout the year. This makes it very difficult, if not impossible, for Member States to estimate the yearly total assessments to their respective treasuries.

In this context the EU wishes to reiterate its support for consolidation of peacekeeping accounts. This would improve the liquidity of individual missions, facilitate the prompt reimbursement of troop contributing countries and would make assessments fewer and more predictable. The EU is aware that Member States voiced concerns about the proposal, but we are convinced that these concerns can be addressed in a way that is beneficial for all. We look forward to discussing this in more detail during the 2nd resumed session in 2007.

We also note that since the current scale only runs through 2006, the Secretariat is unable to issue peacekeeping assessments beyond 31 December this year, although the budget for individual missions had been approved by the Assembly beyond the end of 2006. Thus significant assessments are to be expected to be issued early next year.

Mr. Chairman,

Turning to the International Tribunals, their financial position has remained “relatively healthy” this year. The state of well-being will nevertheless depend on the payment of assessed contributions by Member States during the rest of this year.

As for the Capital Master Plan, $66 million of assessments are still outstanding.  In order to ensure timely implementation of the project, all Member States should pay their assessments in full and on time.

The EU believes that United Nations can only perform its ever increasing and challenging tasks when member states accept their responsibility to pay their contributions in full, on time and without conditions. The final outcome for 2006 all in all depends on action to be taken by a fairly small group of countries. The European Union therefore asks that all Member States take their obligations to the Organisation as seriously as they expect the Secretariat to take theirs, thus avoiding endangering the functioning of the Organisation.

Thank you,  Mr. Chairman.

*) Croatia and the former Yugoslav Republic of Macedonia continue to be part of the Stabilisation and Association Process.