EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

The Council Regulation (EU, EURATOM) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 (‘MFF Regulation’) allows for the mobilisation of the Contingency Margin of up to 0,03 % of Gross National Income for the EU-28 to react to unforeseen circumstances as a last resort instrument. In the technical adjustment of the MFF for 2016, based on Article 6 of the MFF Regulation, the absolute amount of the Contingency Margin for the year 2016 is set at EUR 4 438,2 million.

In accordance with Article 13 of the MFF Regulation, and after having examined all possibilities for financing additional and unforeseen commitment needs, the Commission proposes to mobilise the Contingency Margin for 2016 for an amount of EUR 240,1 million so as to complement the commitment appropriations related to expenditure in heading 3 Security and citizenship in the general budget of the European Union for the financial year 2016, over and above the commitment ceilings of EUR 2 546 million in current prices.

In accordance with point 14 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, the Commission has carried out an analysis of the possibility to reallocate significant amounts within the existing budget.

In accordance with Article 13(3) of the MFF Regulation the Commission proposes to offset the reinforcement of the expenditure ceilings of heading 3 against the unallocated margin available under the expenditure ceilings of heading 5 Administration in 2016.

This proposal complements the decision (EU) 2016/253 of the European Parliament and of the Council of 25 November 2015 to mobilise in full the amount of the Flexibility Instrument available for 2017 (EUR 520 million), 2016 (EUR 510 million) and 2015 (EUR 500 million) in order to cover the cost of immediate budgetary mesures to address the refugee crisis.

2.JUSTIFICATION OF THE MOBILISATION

2.1.INTRODUCTION

The internal dimension of the migration, refugee and security crisis is financed from heading 3 through the Asylum, Migration and Integration Fund (AMIF), the Internal Security Fund (ISF) as well as through specialised agencies such as Frontex, EASO, eu-Lisa and Europol. In addition, a new instrument was adopted by the Council on 15 March 2016 to allow the provision of emergency support of a humanitarian nature in response to the increased influx of refugees and migrants into the Union.

As set out in the related Commission proposal, the funding needs for this new emergency instrument in 2016 were estimated at EUR 300 million in commitment appropriations and EUR 241 million in payment appropriations. EUR 199 million in commitment appropriations and EUR 130,2 million in payment appropriations have been redeployded from AMIF, first in the context of the amending budget No 1/2016 adopted on 13 April 2016 (EUR 100 million in commitment appropriations and EUR 80,2 million in payment appropriations) and then, through a Commission transfer of appropriations implemented in August in accordance with Article 26(1)(c) of the Financial Regulation (EUR 99 million in commitment appropriations and EUR 50 million in payment appropriations).

Likely outstanding needs related to the new emergency instrument, currently estimated at EUR 50 million in commitment appropriations and EUR 10 million in payment appropriations, has still to be financed in 2016. Moreover, the latest reassessment of the AMIF needs by the end of the year requires that the abovementioned redeployments be partially offset by fresh appropriations for an amount of EUR 130 million in commitment only. This partial replenishment of AMIF is combined with a reinforcement of the Borders strand of the Internal Security Fund (ISF-Borders) by EUR 70 million in commitment appropriations, in order to respond to Bulgaria's recent request for emergency assistance. This takes account of the fact that the ISF emergency assistance currently available in the 2016 budget has been almost fully used.

After taking account of the possible redeployments identified on other budget lines under heading 3 (EUR 9,9 million), the Commission has requested to increase commitment appropriations by EUR 240,1 million above the ceiling of this heading in the draft amending budget No 4/2016.

The expenditure ceiling of heading 3 in 2016 stands at EUR 2 546 million in current prices. The commitment appropriations authorised for heading 3 in the 2016 budget are EUR 4 052 million, which has already required the mobilisation of the Flexibility Instrument (EUR 1 506 million) over and above the ceiling of heading 3, in accordance with Article 11(2) of the MFF Regulation.

Spending related to migration, refugees and security represents more than 70 % of total expenditure under the ceiling of heading 3. The Commission has carefully examined all possibilities for redeployment. However, given the limited room for manoeuvre under this heading, it is only possible to cover a small percentage of the needs in commitment appropriations as described above without jeopardising the proper functionning of the other relatively smaller programmes.

As a consequence, the mobilisation of the Contingency Margin is the only possible recourse to meet the budgetary needs in commitment appropriations. Availability of margins in other headings allows this mobilisation to be completely offset in 2016.

The needs in payment appropriations will be accommodated within the 2016 ceiling for payments, thus making the mobilisation of the Contingency Margin in payments unnecessary.

2.2.THE CONTINGENCY MARGIN AS THE LAST RESORT INSTRUMENT

Article 13(1) of the MFF Regulation defines the Contingency Margin as a last resort instrument to react to unforeseen circumstances. In the 2016 Budget, given the absence of unallocated margin under the commitment ceiling of heading 3, the Commission has examined all possibilities for redeployment within the heading.