The United Nations’ European headquarters in Geneva, commonly known as the Palace of Nations, has been temporarily closed due to a liquidity crisis within the organization. This unexpected closure, initially set until January 12, aims to economize on heating, electricity, and maintenance costs amidst a financial shortfall. The surging energy prices have severely strained the UN’s budget, necessitating this drastic measure.
This situation is not the first of its kind for the UN, but the current financial gap is notably wider than in previous years. A significant part of the crisis stems from the delayed or non-payment of assessed contributions by approximately fifty member states. These contributions, calculated based on GDP and the capacity of each country, are crucial for the smooth operation of the UN, including staff salaries and general expenses.
The United States, one of the largest overall contributors to the UN system, is among the countries that have not fully paid their contributions for 2023. The US mission in Geneva indicated a total earmarked amount of $707 million for the UN in 2023, of which only a portion has been paid in line with short-term Congressional funding resolutions.
While the UN continues to function with employees working remotely, essential staff members maintain access to the building. To conserve resources, the administrators of Palais des Nations have disconnected all escalators and reduced heating usage, despite the onset of winter.
The UN Office in Geneva (UNOG) has seen its electricity bill double annually since 2021, further exacerbating the financial strain. The total price increase over the past years is a staggering 344 percent, highlighting the severity of the situation.
The UN Secretary-General, Antonio Guterres, has expressed concern over the deteriorating liquidity situation, urging countries to ensure timely and full payments. While there are no current plans to lay off staff, the UN may have to reduce or suspend some activities and programs or delay payments to staff, contractors, and partners if the situation does not improve.
This situation underscores the fragility of international cooperation mechanisms in the face of financial challenges and the need for member states to fulfill their financial obligations to support the vital work of the United Nations.
