# SEC_2004_675_F1_OTHER_DOCUMENT_EN_V100_P1_436679.docx

EN

| | COMMISSION OF THE EUROPEAN COMMUNITIES |
| --- | --- |

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 28.5.2004

SEC(2004) 675 final

PRELIMINARY DRAFT AMENDING BUDGET No 8
  TO THE GENERAL BUDGET FOR 2004

GENERAL STATEMENT OF REVENUE

(presented by the Commission)

PRELIMINARY DRAFT AMENDING BUDGET No 8
  TO THE GENERAL BUDGET FOR 2004

GENERAL STATEMENT OF REVENUE

Having regard to:

-
     the Treaty establishing the European Community, and in particular Article 272 thereof,

-
     the Treaty establishing the European Atomic Energy Community, and in particular Article 177 thereof,

-
     the Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities
  1
  , and in particular Article 37 thereof,

The European Commission hereby presents to the budgetary authority the preliminary draft amending budget No 8 to the 2004 budget for the reasons set out in the explanatory memorandum.

TABLE OF CONTENTS

EXPLANATORY MEMORANDUM

1.Introduction

2.Revision of the forecasts of Import Duties, VAT bases & GNI

3.Correction of budgetary imbalances in favour of the United Kingdom (2000 and 2003)

3.1.Calculation of the corrections

3.1.1.Update of the correction for 2003

3.1.2.Final calculation of the correction for 2000

3.2.Entry in the 2004 budget of the updated estimate for 2003 and the final amount of the 2000 correction

3.2.1.Amount to be budgeted (chapter 15)

3.2.2.Financing of the corrections to be budgeted (chapter 15)

3.2.3.Result of the definitive calculation of the financing of the 2000 correction (chapter 35)

GENERAL STATEMENT OF REVENUE

The general statement of revenue is forwarded separately via the SEI‐BUD system. A language version is attached as a technical annex by way of example.

EXPLANATORY MEMORANDUM

1.Introduction

The Preliminary Draft Amending Budget No 8 to the Budget for 2004 covers the following points:

–The revision of the forecasts of Agricultural Duties, Customs Duties, VAT bases and GNI and the budgeting of the UK corrections as well as their financing, resulting in a change in the distribution between Member States of the contributions to the Communities' own resources.

–Article 7 of the Council Decision 2000/597/EC, Euratom on the system of the European Communities' own resources states that " ...surplus from the Guarantee Fund arising from external measures, transferred to the revenue account in the budget, shall be regarded as constituting own resources ". In addition to the revision of the forecasts of own resources, this PDAB enters the repayment of the surplus from the Guarantee Fund for external measures related to 2003. This amounts to € 223 160 000.

The following summary table shows the distribution of own resources between Member States as budgeted in the Amending Budget (AB) 1/2004 (that adapts the 2004 budget to the accession of 10 new Member States on 1 May 2004), in the PDAB 7/2004 and as affected by the PDAB 8/2004.

amounts in euro

| | AB 1/2004


  Financing by MS


  (total own resources) | PDAB 7/2004


  Financing by MS


  (total own resources) | PDAB 8/2004


  Financing by MS


  (total own resources) | PDAB 8/2004


  Financing by MS


  (total own resources) | Difference


  PDAB 8/2004


  vs.


  PDAB 7/2004 | Difference


  PDAB 8/2004


  vs.


  AB 1/2004 |
| --- | --- | --- | --- | --- | --- | --- |
| | (1) | (2) | (3) | (4) = (3) in % | (5) = (3) – (2) | (6) = (3) – (1) |
| BE | 3 746 633 291 | 3 592 492 644 | 3 734 143 338 | 4.00 % | 141 650 694 | -12 489 953 |
| CZ | 544 180 062 | 517 005 093 | 553 658 570 | 0.59 % | 36 653 477 | 9 478 508 |
| DK | 2 059 502 022 | 1 953 265 586 | 1 933 350 558 | 2.07 % | -19 915 028 | -126 151 464 |
| DE | 21 862 157 382 | 20 673 315 915 | 20 477 217 068 | 21.95 % | -196 098 847 | -1 384 940 314 |
| EE | 57 103 718 | 54 335 346 | 57 682 994 | 0.06 % | 3 347 648 | 579 276 |
| EL | 1 737 153 959 | 1 648 712 733 | 1 689 325 589 | 1.81 % | 40 612 856 | -47 828 370 |
| ES | 8 196 835 735 | 7 781 068 653 | 8 077 038 039 | 8.66 % | 295 969 386 | -119 797 696 |
| FR | 16 789 029 661 | 15 906 825 633 | 15 941 680 589 | 17.09 % | 34 854 956 | -847 349 072 |
| IE | 1 265 596 215 | 1 201 207 761 | 1 205 526 218 | 1.29 % | 4 318 457 | -60 069 997 |
| IT | 13 664 366 165 | 12 935 536 635 | 13 208 025 402 | 14.16 % | 272 488 767 | -456 340 763 |
| CY | 89 217 635 | 84 835 926 | 84 550 436 | 0.09 % | -285 490 | -4 667 199 |
| LV | 66 864 257 | 63 382 758 | 64 579 847 | 0.07 % | 1 197 089 | -2 284 410 |
| LT | 125 870 309 | 119 910 611 | 125 454 445 | 0.13 % | 5 543 834 | -415 864 |
| LU | 218 035 105 | 206 638 258 | 218 354 843 | 0.23 % | 11 716 585 | 319 738 |
| HU | 559 899 012 | 533 579 968 | 548 711 285 | 0.59 % | 15 131 317 | -11 187 727 |
| MT | 34 657 146 | 33 060 852 | 33 469 206 | 0.04 % | 408 354 | -1 187 940 |
| NL | 5 455 232 508 | 5 198 545 914 | 5 120 425 047 | 5.49 % | -78 120 867 | -334 807 461 |
| AT | 2 213 930 520 | 2 091 147 956 | 2 098 850 690 | 2.25 % | 7 702 734 | -115 079 830 |
| PL | 1 344 201 846 | 1 275 133 727 | 1 239 542 057 | 1.33 % | -35 591 670 | -104 659 789 |
| PT | 1 439 237 572 | 1 365 306 164 | 1 326 825 420 | 1.42 % | -38 480 744 | -112 412 152 |
| SI | 190 863 480 | 181 113 733 | 176 601 415 | 0.19 % | -4 512 318 | -14 262 065 |
| SK | 239 926 878 | 228 122 139 | 223 430 208 | 0.24 % | -4 691 931 | -16 496 670 |
| FI | 1 488 720 549 | 1 408 095 670 | 1 420 210 787 | 1.52 % | 12 115 117 | -68 509 762 |
| SE | 2 684 146 933 | 2 536 489 343 | 2 604 459 430 | 2.79 % | 67 970 087 | -79 687 503 |
| UK | 12 845 366 179 | 11 930 558 555 | 11 133 414 092 | 11.93 % | -797 144 463 | -1 711 952 087 |
| Total EU-25 | 98 918 728 139 | 93 519 687 573 | 93 296 527 573 | 100.00 % | -223 160 000 | -5 622 200 566 |

AB 1/2004

Financing by MS

(total own resources)

PDAB 7/2004

Financing by MS

(total own resources)

PDAB 8/2004

Financing by MS

(total own resources)

PDAB 8/2004

Financing by MS

(total own resources)

Difference

PDAB 8/2004

vs.

PDAB 7/2004

Difference

PDAB 8/2004

vs.

AB 1/2004

(1)

(2)

(3)

(4) = (3) in %

(5) = (3) – (2)

(6) = (3) – (1)

BE

3 746 633 291

3 592 492 644

3 734 143 338

4.00 %

141 650 694

-12 489 953

CZ

544 180 062

517 005 093

553 658 570

0.59 %

36 653 477

9 478 508

DK

2 059 502 022

1 953 265 586

1 933 350 558

2.07 %

-19 915 028

-126 151 464

DE

21 862 157 382

20 673 315 915

20 477 217 068

21.95 %

-196 098 847

-1 384 940 314

EE

57 103 718

54 335 346

57 682 994

0.06 %

3 347 648

579 276

EL

1 737 153 959

1 648 712 733

1 689 325 589

1.81 %

40 612 856

-47 828 370

ES

8 196 835 735

7 781 068 653

8 077 038 039

8.66 %

295 969 386

-119 797 696

FR

16 789 029 661

15 906 825 633

15 941 680 589

17.09 %

34 854 956

-847 349 072

IE

1 265 596 215

1 201 207 761

1 205 526 218

1.29 %

4 318 457

-60 069 997

IT

13 664 366 165

12 935 536 635

13 208 025 402

14.16 %

272 488 767

-456 340 763

CY

89 217 635

84 835 926

84 550 436

0.09 %

-285 490

-4 667 199

LV

66 864 257

63 382 758

64 579 847

0.07 %

1 197 089

-2 284 410

LT

125 870 309

119 910 611

125 454 445

0.13 %

5 543 834

-415 864

LU

218 035 105

206 638 258

218 354 843

0.23 %

11 716 585

319 738

HU

559 899 012

533 579 968

548 711 285

0.59 %

15 131 317

-11 187 727

MT

34 657 146

33 060 852

33 469 206

0.04 %

408 354

-1 187 940

NL

5 455 232 508

5 198 545 914

5 120 425 047

5.49 %

-78 120 867

-334 807 461

AT

2 213 930 520

2 091 147 956

2 098 850 690

2.25 %

7 702 734

-115 079 830

PL

1 344 201 846

1 275 133 727

1 239 542 057

1.33 %

-35 591 670

-104 659 789

PT

1 439 237 572

1 365 306 164

1 326 825 420

1.42 %

-38 480 744

-112 412 152

SI

190 863 480

181 113 733

176 601 415

0.19 %

-4 512 318

-14 262 065

SK

239 926 878

228 122 139

223 430 208

0.24 %

-4 691 931

-16 496 670

FI

1 488 720 549

1 408 095 670

1 420 210 787

1.52 %

12 115 117

-68 509 762

SE

2 684 146 933

2 536 489 343

2 604 459 430

2.79 %

67 970 087

-79 687 503

UK

12 845 366 179

11 930 558 555

11 133 414 092

11.93 %

-797 144 463

-1 711 952 087

Total EU-25

98 918 728 139

93 519 687 573

93 296 527 573

100.00 %

-223 160 000

-5 622 200 566

2.Revision of the forecasts of Import Duties, VAT bases & GNI

According to established practice the Commission proposes to revise the financing of the budget on the basis of more recent economic forecasts, adopted at a meeting of the Advisory Committee on Own Resources (ACOR) that is normally held in April each year.

The revision concerns the forecast of agricultural duties and customs duties to be collected in the current budgetary year as well as of the current year’s VAT bases and GNI. The forecast in the AB 1/2004 was established at the 128th ACOR meeting on 23 April 2003. The present revised forecasts were adopted at the meeting of the 131st ACOR meeting on 20 April 2004. The use of updated forecasts of own resources improves the accuracy of the payments that Member States are asked to make during the budgetary year
  2
  and reduces the unavoidable forecasting errors from the previous year.

As compared to the forecasts agreed in April 2003 for the AB 1/2004, the 4 aggregates subject to revision in the present PDAB are revised as follows:

·Total EU-25 agricultural duties for 2004 are now forecast at € 865.1 million (after deduction of 25 % in collection costs), which represents an increase by +0.71 % relative to the forecast of € 859.0 million in the AB 1/2004. Forecast agricultural duties for EU-15 countries were unchanged. It is only the forecast agricultural duties for the Acceding Countries which were revised upward by +22.0 % from € 27.9 million to € 34.0 million. The main reason for this revision is a substantial growth of extra EU-25 imports of Acceding Countries from 2002 to 2003 (from € 51.1 million to € 54.5 million), while the weighted average tariff decreased only slightly from 1.74 % down to 1.72 %.

·Total EU-25 customs duties for 2004 are now forecast at € 9 981.8 million (after deduction of 25 % in collection costs), which represents a decrease by -1.7 % relative to the forecast of € 10 154.9 million in the AB 1/2004. The main reasons for this decrease are a substantial reduction of the forecast growth rate 2003-2004 of extra EU-15 imports for EU-15 countries (from 6.1 % down to 4.8 %) and to a lesser extent a reduction of the EU-15 weighted average tariff from 1.59 % down to 1.55 %. The forecast of EU-15 customs duties was consequently revised downward by -1.9 % from € 9 850.0 million to € 9 665.0 million. It has to be noted (though it had a more reduced impact) that, on the contrary, forecast customs duties of Acceding Countries were revised upward by +3.9 % from € 305.0 million to € 317.0 million (see explanation in paragraph above, as customs duties and agricultural duties were forecast jointly for Acceding Countries).

·The EU-25 uncapped VAT base at current market prices is forecast to amount to € 46 713.0 million in 2004 at a 1 % rate, which represents an increase of +0.9 % compared to the € 46 301.4 million entered in the AB 1/2004. The EU-25 capped VAT base
  3
  at current market prices is forecast to amount to € 45 507.3 million in 2004 at a 1 % rate, which represents an increase of +0.1 % compared to the € 45 454.3 million entered in the AB 1/2004.

·The EU-25 GNI at current market prices is forecast to amount to € 98 980.9 million in 2004 at a 1 % rate, which represents a decrease by -0.9 % compared to the € 99 890.9 million entered in the AB 1/2004.

The exchange rates of 31 December 2003 have been used for converting the forecast VAT bases and GNI into euro (for the thirteen Member States that are not members of the euro zone). This avoids distortions since it is this rate which is used to convert budget estimates from euro into national currency when the amounts are called in (as stipulated in Article 10(3) of Council Regulation No 1150/2000).

The revised forecasts of agricultural duties, customs duties, uncapped VAT bases and GNI for 2004, as adopted at the 131st ACOR meeting on 20 April 2004, are set out in the following table:

Revised forecasts of customs duties, VAT bases & GNI for 2004 (in €)

| | Agricultural duties


  (75 %) | Customs duties


  (75 %) | Uncapped VAT base


  (at a 1 % rate) | GNI


  (at a 1 % rate) | Capped VAT base3


  (at a 1 % rate) |
| --- | --- | --- | --- | --- | --- |
| BE | 16 125 000 | 1 147 275 000 | 1 132 980 000 | 2 825 190 000 | 1 132 980 000 |
| CZ | 5 775 000 | 53 850 000 | 281 456 667 | 527 080 000 | 263 540 000 |
| DK | 5 175 000 | 195 750 000 | 751 886 000 | 1 928 917 000 | 751 886 000 |
| DE | 101 550 000 | 2 057 175 000 | 9 451 381 000 | 21 696 270 000 | 9 451 381 000 |
| EE | 900 000 | 8 625 000 | 32 106 000 | 51 379 333 | 25 689 667 |
| EL | 8 475 000 | 141 675 000 | 897 770 000 | 1 646 135 000 | 823 067 500 |
| ES | 26 850 000 | 726 825 000 | 4 571 090 000 | 7 841 620 000 | 3 920 810 000 |
| FR | 93 375 000 | 842 250 000 | 7 575 510 000 | 16 112 960 000 | 7 575 510 000 |
| IE | 525 000 | 102 825 000 | 657 675 000 | 1 179 773 000 | 589 886 500 |
| IT | 51 150 000 | 1 035 900 000 | 5 511 310 000 | 13 338 450 000 | 5 511 310 000 |
| CY | 900 000 | 8 475 000 | 63 280 000 | 80 204 000 | 40 102 000 |
| LV | 600 000 | 5 550 000 | 27 868 667 | 63 588 000 | 27 868 667 |
| LT | 2 025 000 | 18 750 000 | 51 188 000 | 113 443 333 | 51 188 000 |
| LU | 150 000 | 12 525 000 | 160 257 000 | 220 670 000 | 110 335 000 |
| HU | 8 850 000 | 82 500 000 | 252 283 333 | 487 954 667 | 243 977 334 |
| MT | 600 000 | 5 325 000 | 18 386 667 | 29 386 667 | 14 693 334 |
| NL | 142 050 000 | 1 061 025 000 | 2 220 805 000 | 4 599 995 000 | 2 220 805 000 |
| AT | 7 575 000 | 153 750 000 | 1 065 330 000 | 2 289 350 000 | 1 065 330 000 |
| PL | 9 900 000 | 92 625 000 | 646 871 333 | 1 213 073 333 | 606 536 667 |
| PT | 14 325 000 | 82 200 000 | 841 380 000 | 1 319 570 000 | 659 785 000 |
| SI | 1 650 000 | 15 300 000 | 96 658 667 | 170 330 667 | 85 165 334 |
| SK | 2 775 000 | 25 950 000 | 95 476 667 | 210 905 333 | 95 476 667 |
| FI | 2 625 000 | 72 750 000 | 641 720 000 | 1 471 320 000 | 641 720 000 |
| SE | 10 350 000 | 266 850 000 | 1 210 952 000 | 2 788 731 000 | 1 210 952 000 |
| UK | 350 850 000 | 1 766 100 000 | 8 457 364 000 | 16 774 645 000 | 8 387 322 500 |
| Total EU-25 | 865 125 000 | 9 981 825 000 | 46 712 986 001 | 98 980 941 333 | 45 507 318 170 |

Agricultural duties

(75 %)

Customs duties

(75 %)

Uncapped VAT base

(at a 1 % rate)

GNI

(at a 1 % rate)

Capped VAT base3

(at a 1 % rate)

BE

16 125 000

1 147 275 000

1 132 980 000

2 825 190 000

1 132 980 000

CZ

5 775 000

53 850 000

281 456 667

527 080 000

263 540 000

DK

5 175 000

195 750 000

751 886 000

1 928 917 000

751 886 000

DE

101 550 000

2 057 175 000

9 451 381 000

21 696 270 000

9 451 381 000

EE

900 000

8 625 000

32 106 000

51 379 333

25 689 667

EL

8 475 000

141 675 000

897 770 000

1 646 135 000

823 067 500

ES

26 850 000

726 825 000

4 571 090 000

7 841 620 000

3 920 810 000

FR

93 375 000

842 250 000

7 575 510 000

16 112 960 000

7 575 510 000

IE

525 000

102 825 000

657 675 000

1 179 773 000

589 886 500

IT

51 150 000

1 035 900 000

5 511 310 000

13 338 450 000

5 511 310 000

CY

900 000

8 475 000

63 280 000

80 204 000

40 102 000

LV

600 000

5 550 000

27 868 667

63 588 000

27 868 667

LT

2 025 000

18 750 000

51 188 000

113 443 333

51 188 000

LU

150 000

12 525 000

160 257 000

220 670 000

110 335 000

HU

8 850 000

82 500 000

252 283 333

487 954 667

243 977 334

MT

600 000

5 325 000

18 386 667

29 386 667

14 693 334

NL

142 050 000

1 061 025 000

2 220 805 000

4 599 995 000

2 220 805 000

AT

7 575 000

153 750 000

1 065 330 000

2 289 350 000

1 065 330 000

PL

9 900 000

92 625 000

646 871 333

1 213 073 333

606 536 667

PT

14 325 000

82 200 000

841 380 000

1 319 570 000

659 785 000

SI

1 650 000

15 300 000

96 658 667

170 330 667

85 165 334

SK

2 775 000

25 950 000

95 476 667

210 905 333

95 476 667

FI

2 625 000

72 750 000

641 720 000

1 471 320 000

641 720 000

SE

10 350 000

266 850 000

1 210 952 000

2 788 731 000

1 210 952 000

UK

350 850 000

1 766 100 000

8 457 364 000

16 774 645 000

8 387 322 500

Total EU-25

865 125 000

9 981 825 000

46 712 986 001

98 980 941 333

45 507 318 170

3.Correction of budgetary imbalances in favour of the United Kingdom (2000 and 2003)

The correction of budgetary imbalances in favour of the UK to be budgeted in the present PDAB concerns two years (2000 and 2003). As the UK correction of a certain year is to be financed in the following year, all 25 Member States participate in the financing of the 2003 correction. The financing of the 2000 correction does, on the other hand, only concern the 15 countries that were Member States in 2001.

The 2003 correction is subject to the rules of the new Council Decision on the system of the European Communities’ own resources (2000/597/EC, Euratom)
  4
  and its accompanying working document
  5
  (“The Calculation Method”), whereas the rules of the previous Own resources Decision
  6
  and its accompanying working document
  7
  still apply to the 2000 correction.

The new “Calculation Method” neutralises the net gains (the “windfall gains”) of the UK that result from the increase in the percentage of traditional own resources (TOR) retained by Member States. Adjustments are also foreseen as a consequence of the present as well as future enlargements of the Union.

Furthermore, according to the new Own Resources Decision the share of Austria, Germany, the Netherlands and Sweden in the financing of the UK correction is reduced to one fourth of their normal share. The reduction is financed by the other Member States, excluding the UK. The new financing rules consequently have an impact on the so-called frozen rate.

Since the two corrections to be budgeted in this PDAB are financed according to different rules and by different Member States, two frozen rates consequently have to be calculated (presented after table 1 in part A of the general statement of revenue). The resulting uniform rate of call of VAT is the difference between the maximum rate of call (0.50 % of the capped VAT base) and the sum of the two frozen rates.

3.1.Calculation of the corrections

According to the “Calculation Method” the Commission shall propose an update of the provisional estimate of the correction if it has ground to believe that the initial calculation will differ significantly from the definitive calculation of the correction. In the present PDAB it is proposed that the 2003 correction, previously entered in the initial budget 2004
  8
  , be updated. Furthermore, the result of the final calculation of the 2000 correction and its financing is also budgeted in this PDAB.

3.1.1.Update of the correction for 2003

The current estimate does differ significantly compared to the estimate of the 2003 correction entered in the budget 2004. An update of the 2003 correction, to be inserted in the present PDAB, is therefore proposed.

The following table summarises the changes compared to the estimate entered in the budget 2004 (rounded figure).

| Table 1 | BUDGET 2004 | PDAB 8/2004 | DIFFERENCE |
| --- | --- | --- | --- |
| UK correction 2003 | (1) | (2) | (3) = (2) - (1) |
| 1. Percentage share of the UK


  in the total sum of uncapped VAT bases | 19.27 % | 18.50 % | - 0.77 % |
| 2. Percentage share of the UK


  in total allocated expenditure | 8.88 % | 7.68 % | -1.21 % |
| 3. (1) – (2) | 10.38 % | 10.82 % | 0.44 % |
| 4. Total allocated expenditure | 78 012 899 288 | 82 025 811 437 | 4 012 912 148 |
| 5. (3) x (4) | 8 101 226 495 | 8 875 351 609 | 774 125 114 |
| 6. Original amount of the UK rebate = 0.66 x (5) | 5 346 809 487 | 5 857 732 062 | 510 922 575 |
| 7. UK advantage | 620 520 210 | 447 826 885 | -172 693 325 |
| 8. Core UK rebate = (6)–(7) | 4 726 289 277 | 5 409 905 177 | 683 615 900 |
| 9. TOR windfall gains | 66 539 370 | 18 346 139 | -48 193 232 |
| 10. Amount of the UK correction = (8) – (9) | 4 659 749 907 | 5 391 559 038 | 731 809 132 |

Table 1

BUDGET 2004

PDAB 8/2004

DIFFERENCE

UK correction 2003

(1)

(2)

(3) = (2) - (1)

1. Percentage share of the UK

in the total sum of uncapped VAT bases

19.27 %

18.50 %

- 0.77 %

2. Percentage share of the UK

in total allocated expenditure

8.88 %

7.68 %

-1.21 %

3. (1) – (2)

10.38 %

10.82 %

0.44 %

4. Total allocated expenditure

78 012 899 288

82 025 811 437

4 012 912 148

5. (3) x (4)

8 101 226 495

8 875 351 609

774 125 114

6. Original amount of the UK rebate = 0.66 x (5)

5 346 809 487

5 857 732 062

510 922 575

7. UK advantage

620 520 210

447 826 885

-172 693 325

8. Core UK rebate = (6)–(7)

4 726 289 277

5 409 905 177

683 615 900

9. TOR windfall gains

66 539 370

18 346 139

-48 193 232

10. Amount of the UK correction = (8) – (9)

4 659 749 907

5 391 559 038

731 809 132

Table 1 shows that, as a result of these changes, the updated figure for the 2003 UK correction is approximately € 731.8 million higher compared to the previously budgeted amount.

The difference is due to the combined effect of five factors, which could be quantified as follows:

·The decrease in the UK’s share of European Union expenditure increases the correction by around € 622.3 million.

·The increase in total expenditure allocated to the Member States compared to the previous estimate increases the correction by around € 286.6 million.

·The decrease in the so-called UK advantage increases the correction by around € 172.7 million. The “advantage” is the benefit that the UK derives from the current own resources system as compared to the previous ones (due to the introduction of the GNP/GNI resource and the capping of the VAT bases).

·The decrease in the so-called TOR windfall gains (see third paragraph of the introduction to the UK correction above) increases the correction by around € 48.2 million.

·The increase in the UK’s share of European Union revenue (measured as its share in the total EU uncapped VAT base) decreases the correction by around € 397.9 million.

The revised estimate for the UK correction for the year 2003 consequently amounts to € 5 391 559 038, which corresponds to an increase by € 731 809 132 as compared to the first provisional estimate entered in the 2004 budget.

3.1.2.Final calculation of the correction for 2000

The result of the final calculation of the correction for 2000 amounts to € 4 132 577 623, i.e. a decrease of € 293 991 119 as compared to the previously budgeted amount in the supplementary and amending budget (SAB) 3/2001.

The following table summarises the changes compared to the provisional estimate entered in the SAB 3/2001.

| Table 2 | SAB 3/2001 | PDAB 8/2004 | Difference |
| --- | --- | --- | --- |
| UK correction 2000 | (1) | (2) | (3) = (2) - (1) |
| 1.
     UK's share of uncapped VAT payments | 19.41 % | 18.71 % | -0.70 % |
| 2.
     UK's share of allocated expenditure | 10.19 % | 10.43 % | 0.24 % |
| 3.
     (1) - (2) | 9.22 % | 8.28 % | -0.94 % |
| 4.
     Total allocated expenditure | 72 690 934 529 | 74 700 969 031 | 2 010 034 502 |
| 5.
     (3) x ( 4) | 6 701 173 504 | 6 183 698 001 | -517 475 503 |
| 6.
     0.66 x (5) | 4 422 774 513 | 4 081 240 681 | -341 533 832 |
| 7.
     UK advantage | -3 794 230 | -51 336 943 | -47 542 713 |
| 8.
     Reference compensation = (6) - (7) | 4 426 568 742 | 4 132 577 623 | -293 991 119 |

Table 2

SAB 3/2001

PDAB 8/2004

Difference

UK correction 2000

(1)

(2)

(3) = (2) - (1)

1.
     UK's share of uncapped VAT payments

19.41 %

18.71 %

-0.70 %

2.
     UK's share of allocated expenditure

10.19 %

10.43 %

0.24 %

3.
     (1) - (2)

9.22 %

8.28 %

-0.94 %

4.
     Total allocated expenditure

72 690 934 529

74 700 969 031

2 010 034 502

5.
     (3) x ( 4)

6 701 173 504

6 183 698 001

-517 475 503

6.
     0.66 x (5)

4 422 774 513

4 081 240 681

-341 533 832

7.
     UK advantage

-3 794 230

-51 336 943

-47 542 713

8.
     Reference compensation = (6) - (7)

4 426 568 742

4 132 577 623

-293 991 119

The difference relative to the previously budgeted amount is due to the combined effect of four factors, which could be quantified as follows:

·The decrease in the UK’s share of European Union revenue (measured as its share in the total EU uncapped VAT base) decreases the correction by around € 336.6 million.

·The increase in the UK’s share of European Union expenditure decreases the correction by around € 114.7 million.

·The increase in total expenditure allocated to the Member States increases the correction by around € 109.8 million.

·The decrease in the so-called UK advantage increases the correction by around € 47.5 million. The “advantage” is the benefit
  9
  that the UK derives from the current own resources system as compared to the previous ones (due to the introduction of the GNP/GNI resource and the capping of the VAT bases).

3.2.Entry in the 2004 budget of the updated estimate for 2003 and the final amount of the 2000 correction

3.2.1.Amount to be budgeted (chapter 15)

The total amount of the UK corrections to be budgeted in the present PDAB 8/2004 is the sum of:

·The total amount of the revised estimate for the 2003 correction (€ 5 391 559 038, in replacement of the € 4 659 749 907 budgeted in the Budget 2004), and

·The difference between the final amount of the 2000 correction and the amount previously budgeted (in the SAB 3/2001).

The amount to be entered in the present PDAB is therefore equal to:

€ 5 391 559 038 + (- € 293 991 119) = € 5 097 567 919.

3.2.2.Financing of the corrections to be budgeted (chapter 15)

According to the “Calculation Method” the correction for year n shall be financed according to the GNP/GNI
  10
  key of year n + 1.

The total amount of the revised estimate for 2003 is therefore financed according to the revised GNI key of the present PDAB and the result is budgeted in chapter 15.

Concerning the final correction for 2000, the 1994 “Calculation Method” states that in addition to the final calculation of the amount of the UK correction, a definitive calculation should also be made for the financing. The final correction for 2000 is therefore budgeted in two steps. The difference between the final amount of the 2000 correction and the amount previously budgeted (in the SAB 3/2001) is entered in chapter 15 according to the GNI key of the present PDAB. The entire financing is then recalculated according to the final GNP and VAT bases of the year 2000 and compared with the payments already entered in the present as well as the previous budgets. The difference per Member State is entered in chapter 35 (see below Result of the definitive calculation of the financing of the 2000 correction – chapter 35). The definitive calculation of the 2000 correction is an adjustment of the previous estimate budgeted and financed in 2001. As a consequence, it does not concern the 10 new Member States.

The budgeting in chapter 15 of the two different UK corrections according to the GNI keys of the present PDAB is summarised below.

| Table 3 - Financing of UK corrections in chapter 15 |
| --- |
| | | UK correction 2000a | UK correction 2003 | Total of chapter 15 |
| | | (1) | (2) | (3) = (1) + (2) |
| | BE | -11 795 938 | 271 066 206 | 259 270 268 |
| | CZ | --- | 50 571 316 | 50 571 316 |
| | DK | -8 053 754 | 185 072 230 | 177 018 476 |
| | DE | -53 651 236 | 355 741 367 | 302 090 131 |
| | EE | --- | 4 929 651 | 4 929 651 |
| | EL | -6 873 062 | 157 940 375 | 151 067 313 |
| | ES | -32 740 901 | 752 373 534 | 719 632 633 |
| | FR | -67 276 001 | 1 545 977 063 | 1 478 701 062 |
| | IE | -4 925 874 | 113 194 720 | 108 268 846 |
| | IT | -55 691 665 | 1 279 773 409 | 1 224 081 744 |
| | CY | --- | 7 695 268 | 7 695 268 |
| | LV | --- | 6 101 026 | 6 101 026 |
| | LT | --- | 10 884 455 | 10 884 455 |
| | LU | - 921 357 | 21 172 445 | 20 251 088 |
| | HU | --- | 46 817 389 | 46 817 389 |
| | MT | --- | 2 819 539 | 2 819 539 |
| | NL | -19 206 233 | 75 423 495 | 56 217 262 |
| | AT | -9 558 660 | 37 537 166 | 27 978 506 |
| | PL | --- | 116 389 760 | 116 389 760 |
| | PT | -5 509 564 | 126 607 709 | 121 098 145 |
| | SI | --- | 16 342 578 | 16 342 578 |
| | SK | --- | 20 235 562 | 20 235 562 |
| | FI | -6 143 162 | 141 167 543 | 135 024 381 |
| | SE | -11 643 712 | 45 725 232 | 34 081 520 |
| | UK | 293 991 119 | - 5 391 559 038 | - 5 097 567 919 |
| | Total | 0 | 0 | 0 |

Table 3 - Financing of UK corrections in chapter 15

UK correction 2000a

UK correction 2003

Total of chapter 15

(1)

(2)

(3) = (1) + (2)

BE

-11 795 938

271 066 206

259 270 268

CZ

---

50 571 316

50 571 316

DK

-8 053 754

185 072 230

177 018 476

DE

-53 651 236

355 741 367

302 090 131

EE

---

4 929 651

4 929 651

EL

-6 873 062

157 940 375

151 067 313

ES

-32 740 901

752 373 534

719 632 633

FR

-67 276 001

1 545 977 063

1 478 701 062

IE

-4 925 874

113 194 720

108 268 846

IT

-55 691 665

1 279 773 409

1 224 081 744

CY

---

7 695 268

7 695 268

LV

---

6 101 026

6 101 026

LT

---

10 884 455

10 884 455

LU

- 921 357

21 172 445

20 251 088

HU

---

46 817 389

46 817 389

MT

---

2 819 539

2 819 539

NL

-19 206 233

75 423 495

56 217 262

AT

-9 558 660

37 537 166

27 978 506

PL

---

116 389 760

116 389 760

PT

-5 509 564

126 607 709

121 098 145

SI

---

16 342 578

16 342 578

SK

---

20 235 562

20 235 562

FI

-6 143 162

141 167 543

135 024 381

SE

-11 643 712

45 725 232

34 081 520

UK

293 991 119

- 5 391 559 038

- 5 097 567 919

Total

0

0

0

a
     Budgeting of the difference as compared to the amount previously budgeted in the SAB 3/2001.

3.2.3.Result of the definitive calculation of the financing of the 2000 correction (chapter 35)

The definitive calculation of the financing of the 2000 correction is based on the final amount of the correction and on the actual GNP and VAT bases of n + 1 (2001) as they appear at the end of n + 3 (2003).

The amounts budgeted in chapter 35 corrects for:

·The differences as regards the “direct effect”, i.e. the difference between what each Member State should pay for the final amount of the 2000 correction according to the final 2001 GNP financing key on the one hand and the amounts previously budgeted in respect of the 2000 correction, as well as

·the differences as regards the “indirect effect”, i.e. the difference between the implicit effect of the final amount of the 2000 correction on Member States’ payments due to its impact on the uniform rate of VAT (and the corresponding effects on each Member State’s VAT and GNP/GNI payments
  11
  ) on the one hand and the implicit effects of the amounts previously budgeted in respect of the 2000 correction.

The budgeting of the 2000 UK correction concerns two different years:

–The first provisional amount was budgeted in the 2001 budget and refinanced in the SAB 3/2001,

–the difference between the final amount and the amount previously budgeted (in the SAB 3/2001) is inserted in chapter 15 of the present PDAB (and financed according to the current 2004 GNI key).

The direct and indirect effect of the final amount of the 2000 correction financed according to the definitive 2001 financing key consequently has to be compared with the sum of the direct and indirect effects in both of the years mentioned above.

The results are shown in table 4.

| Table 4 - Chapter 35 – financing of the 2000 UK correction |
| --- |
| | Direct effect | Indirect effect | Total |
| | | (1) | (2) | (3) = (1) + (2) |
| | BE | -5 021 431 | 1 942 524 | -3 078 908 |
| | DK | -1 927 781 | -14 363 142 | -16 290 924 |
| | DE | -10 875 821 | 60 109 713 | 49 233 892 |
| | EL | 391 383 | -1 994 710 | -1 603 327 |
| | ES | 6 524 407 | -9 993 012 | -3 468 605 |
| | FR | 18 551 727 | -1 915 945 | 16 635 782 |
| | IE | 17 940 | -1 570 409 | -1 552 469 |
| | IT | 2 338 574 | -6 902 994 | -4 564 420 |
| | LU | 75 720 | -309 133 | -233 413 |
| | NL | -4 572 989 | -4 598 575 | -9 171 563 |
| | AT | -2 383 418 | -226 737 | -2 610 155 |
| | PT | 401 845 | -1 803 544 | -1 401 699 |
| | FI | -511 933 | -1 723 714 | -2 235 647 |
| | SE | -3 008 223 | -873 471 | -3 881 694 |
| | UK | 0 | -15 776 850 | -15 776 850 |
| | Total | 0 | 0 | 0 |

Table 4 - Chapter 35 – financing of the 2000 UK correction

Direct effect

Indirect effect

Total

(1)

(2)

(3) = (1) + (2)

BE

-5 021 431

1 942 524

-3 078 908

DK

-1 927 781

-14 363 142

-16 290 924

DE

-10 875 821

60 109 713

49 233 892

EL

391 383

-1 994 710

-1 603 327

ES

6 524 407

-9 993 012

-3 468 605

FR

18 551 727

-1 915 945

16 635 782

IE

17 940

-1 570 409

-1 552 469

IT

2 338 574

-6 902 994

-4 564 420

LU

75 720

-309 133

-233 413

NL

-4 572 989

-4 598 575

-9 171 563

AT

-2 383 418

-226 737

-2 610 155

PT

401 845

-1 803 544

-1 401 699

FI

-511 933

-1 723 714

-2 235 647

SE

-3 008 223

-873 471

-3 881 694

UK

0

-15 776 850

-15 776 850

Total

0

0

0

The direct and indirect effects of the final amount of the 2000 correction financed according to the definitive financing keys of n + 1 and the direct and indirect effects of the amounts budgeted in respect of the 2000 UK correction in the SAB 3/2001 and in chapter 15 of the present PDAB are compared in table 5.

| Table 5
     Overall summary : final financing of the 2000 UK correction |
| --- |
| | FINAL 2000 CORRECTION
  (including the indirect effect) | DIRECT AND INDIRECT EFFECTS OF: | BALANCES TO BE BUDGETED |
| | | SAB 3/2001
  (Chapter 15) | PDAB 8/2004
  (Chapter 15) | Total previous effects | PDAB 8/2004
  Chapter 35 |
| | (1) | (2) | (3) | (4) = (2)+(3) | (5) = (1)-(4) |
| BE | 190 354 637 | 206 734 627 | -13 301 082 | 193 433 545 | -3 078 908 |
| DK | 114 643 590 | 140 215 947 | -9 281 433 | 130 934 514 | -16 290 924 |
| DE | 799 578 317 | 808 624 054 | -58 279 629 | 750 344 425 | 49 233 892 |
| EL | 78 586 550 | 86 435 581 | -6 245 704 | 80 189 877 | -1 603 327 |
| ES | 385 122 767 | 418 343 754 | -29 752 382 | 388 591 372 | -3 468 605 |
| FR | 898 906 909 | 947 847 400 | -65 576 273 | 882 271 127 | 16 635 782 |
| IE | 63 404 153 | 69 432 872 | -4 476 251 | 64 956 622 | -1 552 469 |
| IT | 935 053 577 | 1 000 917 963 | -61 299 967 | 939 617 996 | -4 564 420 |
| LU | 12 381 266 | 13 451 936 | -837 258 | 12 614 678 | -233 413 |
| NL | 255 218 893 | 282 574 817 | -18 184 361 | 264 390 457 | -9 171 563 |
| AT | 135 731 529 | 147 760 489 | -9 418 806 | 138 341 683 | -2 610 155 |
| PT | 72 110 820 | 78 519 182 | -5 006 663 | 73 512 519 | -1 401 699 |
| FI | 97 798 260 | 106 483 738 | -6 449 831 | 100 033 907 | -2 235 647 |
| SE | 163 292 585 | 179 448 744 | -12 274 465 | 167 174 279 | -3 881 694 |
| UK
  12 | -4 202 183 852 | -4 486 791 106 | 300 384 104 | -4 186 407 002 | -15 776 850 |
| TOTAL | 0 | 0 | 0 | 0 | 0 |

Table 5
     Overall summary : final financing of the 2000 UK correction

FINAL 2000 CORRECTION
  (including the indirect effect)

DIRECT AND INDIRECT EFFECTS OF:

BALANCES TO BE BUDGETED

SAB 3/2001
  (Chapter 15)

PDAB 8/2004
  (Chapter 15)

Total previous effects

PDAB 8/2004
  Chapter 35

(1)

(2)

(3)

(4) = (2)+(3)

(5) = (1)-(4)

BE

190 354 637

206 734 627

-13 301 082

193 433 545

-3 078 908

DK

114 643 590

140 215 947

-9 281 433

130 934 514

-16 290 924

DE

799 578 317

808 624 054

-58 279 629

750 344 425

49 233 892

EL

78 586 550

86 435 581

-6 245 704

80 189 877

-1 603 327

ES

385 122 767

418 343 754

-29 752 382

388 591 372

-3 468 605

FR

898 906 909

947 847 400

-65 576 273

882 271 127

16 635 782

IE

63 404 153

69 432 872

-4 476 251

64 956 622

-1 552 469

IT

935 053 577

1 000 917 963

-61 299 967

939 617 996

-4 564 420

LU

12 381 266

13 451 936

-837 258

12 614 678

-233 413

NL

255 218 893

282 574 817

-18 184 361

264 390 457

-9 171 563

AT

135 731 529

147 760 489

-9 418 806

138 341 683

-2 610 155

PT

72 110 820

78 519 182

-5 006 663

73 512 519

-1 401 699

FI

97 798 260

106 483 738

-6 449 831

100 033 907

-2 235 647

SE

163 292 585

179 448 744

-12 274 465

167 174 279

-3 881 694

UK
  12

-4 202 183 852

-4 486 791 106

300 384 104

-4 186 407 002

-15 776 850

TOTAL

0

0

0

0

0