The Palais des Nations, the headquarters of the United Nations in Geneva, is facing an unprecedented crisis. Energy prices are skyrocketing, member states are not paying their contributions on time, and the organization is bankrupt. The consequences: power outages, restrictions on building operations and the closure of the palace for two weeks in December 2023.

Electricity costs are exploding: The palace’s electricity bill has quadrupled in the last three years. The increased energy prices are hitting UNOG particularly hard, as the building complex with its 34 conference rooms and 59 elevators is a large electricity consumer. In 2023, the price of electricity per kilowatt hour will have quadrupled from 10 to 40 cents.

Budget deficit and defaulting contributors: The UN’s regular budget for 2023 does not cover the costs. Although member states’ contributions are calculated based on each country’s gross domestic product and capacities, around 50 out of 193 states have not made their full contributions for 2023. The defaulters include the largest contributor, the United States. The US has so far only paid $200 million out of $707 million.

Limitations and consequences: In order to reduce costs, UNOG has already had to take drastic cost-cutting measures. These include reducing lighting and heating, closing the library building on Fridays and shortening opening hours. The closure of the palace in December 2023 was another drastic step that severely affected the work of the UNOG.

Future outlook uncertain: The UN’s liquidity crisis is worrying. Secretary General Antonio Guterres has already warned of the negative impact on program design and called on member states to pay contributions on time and in full. It remains to be seen whether the UN will have to limit or even stop its activities and programs in the future.

Additional points:

The closure of the Palais des Nations also has an impact on the local economy in Geneva. Restaurants, cafes and hotels in the area are suffering due to the absence of UN employees.
The UNOG is not the only UN location affected by the financial crisis. Other offices in New York, Nairobi and Vienna are also struggling with austerity measures.
Reforming the UN financial system has been discussed for years. However, it is questionable whether and when a reform can be implemented.