EN Official Journal of the European Union C 293/1

FINANCIAL ACTIVITY REPORT 2010

Section II — European Council and Council

2011/C 293/01

TABLE OF CONTENTS

1. SUMMARY

2. INTRODUCTION

3. OBJECTIVES AND BUDGET FOR THE FINANCIAL YEAR 2010

3.1. The main administrative objectives

3.2. Establishment of the budget for the European Council and Council in 2010

3.2.1. Common budget structure

3.2.2. Additional appropriations related to the Treaty of Lisbon

3.2.3. Budget 2010

3.2.4. Budget 2010 and the financial perspectives of Heading 5 of the EU budget

4. GLOBAL OVERVIEW OF BUDGET IMPLEMENTATION IN 2010

4.1. Activities and objectives in 2010

4.1.1. European Council and Council activities in 2010

4.1.2. Achievement of administrative objectives in 2010

4.2. Revenue

4.2.1. Revenue accrued in 2010

4.2.2. Revenue accrued before 2010

4.3. Expenditure in 2010

4.3.1. Overview of implementation of the budget in 2004-2010

4.3.2. Implementation of the appropriations by category 2010

4.3.3. Modification of the budget in 2010

4.4. Appropriations carried over

4.4.1. Implementation of the carryover appropriations from 2009

4.4.2. Appropriations carried over from 2010 to 2011

4.5. Assigned revenue

4.5.1. Assigned revenue accrued before 2010

4.5.2. Assigned revenue accrued in 2010

1. SUMMARY

2010 was a year of fundamental change for Section II of the budget of the EU. As a consequence of the entry into force of the Treaty of Lisbon, the additional expenditure foreseen for the functioning of the European Council was included in this section.

The letter of amendment to the preliminary draft budget for the financial year 2010 for the Council (15639/1/09) added EUR 25 million as a technical provision in Section II of the EU budget for the functioning of the European Council and its President.

During 2010, the General Secretariat of the Council (GSC) also prepared its organisation to face the consequences of the creation of the European External Action Service. On 1 January 2011, the GSC transferred 411 posts and EUR 80 million to this new EU organisation.

At the same time, the GSC continued its administrative modernisation introducing improvements in the working environment, IT and in financial management. It also proceeded with the building project of the Résidence Palace, which is to be converted into the seat of the European Council and Council meetings from 2014 onwards.

The European Council and Council budget 2010 was established at EUR 633,6 million. At the end of the financial year 2010 an amount of EUR 592,9 million was used (corresponding to an implementation rate of 93,6 %).

The main reasons for the under-spending of EUR 40,7 million are:

— the lower need for interpretation (EUR 9,1 million),

— under-occupation of the establishment plan and lower salary costs (EUR 8,7 million),

— under-spending of the delegations’ travel envelopes in Title II (EUR 6,9 million),

— non-activation of the reserve (EUR 6 million),

— postponement of some IT projects in Title III, such as SESAME (EUR 2,8 million),

— fewer needs in fitting-out works in the Council buildings (EUR 1,9 million) and savings in costs for missions (EUR 0,9 million).

The implementation of amounts carried over from 2009 to 2010 totalled EUR 34,2 million out of EUR 41,1 million. Irrespective of the various reasons (e.g. non-delivery of works/goods/service; non-invoicing of the GSC) the implementation of the carried-over amounts should be increased in the future. This would in turn reduce the risk of using the following year’s budget for expenditure of the past.

The GSC’s revenue operations in 2010 amounted to EUR 100,5 million. From this amount, EUR 92,9 million were recovered during the financial year while the rest will be recovered in 2011.

The main part (EUR 60,6 million, or 65 %) of these recovered revenues are related to the Community taxes, levies and dues which were collected from the GSC's staff in 2010. An amount of EUR 31,1 million in 2010 is related to different administrative operations whereas EUR 1,1 million relate to various contributions and repayments under community agreements. In most of these two last cases the amounts were used to finance specific items of expenditure (assigned revenue).

The majority of the amounts of assigned revenue (76 %) are related to the delegations’ travel expenses: EUR 24,3 million were recovered from the Member States based on their declarations on the use of the travel envelopes in 2009. In addition, EUR 2,2 million were paid by certain Member States for additional interpretation in their own language.

In 2010, the GSC had at its disposal EUR 41,7 million of assigned revenue which was accrued before 2010. By the end of the financial year EUR 40 million had been used.

2. INTRODUCTION

This report is based, in conformity with Article 128 of the Financial Regulation, on the accounts for 2010, the findings in the annual activity reports of the Council's authorising officers and the budget implementation information from the Council’s financial system.

The report corresponds also to the obligations of Article 122 of the Financial Regulation and Article 185 of the Implementing Rules providing an overview of budgetary and financial management in the Council in 2010.

Chapter 3 describes the framework in which the budget 2010 was established, and Chapter 4 provides an overview on the implementation of the budget appropriations in 2010.

The implementation of the budget 2010 by budget line is presented in a Table in the Annex.

3. OBJECTIVES AND BUDGET FOR THE FINANCIAL YEAR 2010

3.1. The main administrative objectives

The main administrative objectives of the General Secretariat of the Council (GSC hereafter) for 2010 were:

— To ensure an efficient start-up and functioning of the European Council and its President.

— Further progress on administrative modernisation. The General Secretariat has established an ambitious programme to reinforce the quality of its organisation. Various initiatives have or will have a budgetary impact (in terms of both investment costs and economies resulting from increased efficiency).

— Continuation of the construction of the Résidence Palace, which should be ready by 2014.

— Adapting its organisation to the creation of the European External Action Service.

3.2. Establishment of the budget for the European Council and Council in 2010

3.2.1. Common budget structure

Since the European Council will be assisted by the General Secretariat of the Council (Article 235(4) of the TFEU), the expenditure for its functioning is presented in a common budget structure with the Council (Section II of the budget of the European Union) (1).

The creation of the European Council as an institution has had essentially two consequences for Section II of the EU budget:

— the appointment of the President of the European Council and the organisation of his direct support (Private Office),

— the budgeting in the EU budget of the summits which were previously paid for by the Member State holding the Presidency.

3.2.2. Additional appropriations related to the Treaty of Lisbon

The letter of amendment to the preliminary draft budget for the financial year 2010 for the Council (15639/1/09) added EUR 25 million as a technical provision in Section II of the EU budget (European Council and Council; ECC hereafter).

The technical provision of EUR 25 million was based on an estimation of needs necessary for an efficient start-up of the European Council and its President.

The breakdown of estimated additional amounts are presented in Table 1.

Table 1

Additional appropriations related to the Treaty of Lisbon

(EUR million) Destination Amount European Council 12,1 Summits 6,5 Meetings with third countries 2,5 Reinforcement of the GSC’s infrastructure 3,1 President of the European Council 6,0 President 1,5 Private office and security 4,5 Co-decision 1,9 Reserve 5,0 Total 25,0

From the EUR 25 million provision, EUR 12,1 million covered the costs related to organising summits (previously financed by the rotating Presidencies) and other meetings of the European Council. EUR 6 million were planned to cover the staff related costs and operational costs of the President of the European Council and his Private Office.

To cover the cost for the Council for the increase in volume of co-decision procedures (e.g. preparation of legislation, Irish translation) an amount of EUR 1,9 million was foreseen.

Finally, an amount of EUR 5 million was placed in the contingency reserve to cover the unforeseen requirements of the new institution and its President.

3.2.3. Budget 2010

The overall ECC budget 2010 was established at EUR 633,6 million.

The increase of EUR 30,7 million (5,1 %) compared to the 2009 budget breaks down as follows:

— impact of the Treaty of Lisbon EUR 25 million,

— a nominal increase of EUR 12,9 million (2),

— a reduction in the budget in real terms of EUR 7,2 million.

To address the consequences of the Treaty of Lisbon, the establishment plan 2010 of the ECC was increased by 60 posts: 32 posts (temporary agents) for the Private Office of the President of the European Council and 28 posts (permanent posts) to reinforce various GSC services, notably Press and Communication, Protocol, Conferences and Infrastructures as well as the Department for General Political Questions. The staff needs of other GSC's departments were covered by redeployment.

Table 2 gives an overview on how the budget 2010 was established by category. The initial draft budget (without the impact of the Treaty of Lisbon) showed an overall increase of 1,2 %. In the majority of the categories there was a reduction compared to 2009 and in principle only the Council decision on the adjustment of the remuneration for 2009 resulted an increase in the categories concerned. The reserve was set at the level of previous years, EUR 2,5 million (3).

Table 2

ECC budget 2010 compared to the Council budget 2009 (by category)

(EUR) Category Budget 2009 Budget 2010 without Treaty Impact of Treaty (4) Budget 2010 with Treaty Difference, % (without Treaty) Difference, % (with Treaty) 1 2 3 4 5=2/1 6=4/1 Establishment plan 311 521 000 318 219 000 5 751 000 323 970 000 2,2 % 4,0 % Other staff expenditure 22 612 000 21 225 000 2 287 000 23 512 000 –6,1 % 4,0 % Buildings (Title II) 37 962 000 37 517 000 2 400 000 39 917 000 –1,2 % 5,1 % Computer systems (Title II) 34 097 000 34 048 000 1 469 000 35 517 000 –0,1 % 4,2 % Interpreting costs 90 456 000 91 697 000 1 043 000 92 740 000 1,4 % 2,5 % Delegations’ travel expenses 36 071 000 36 792 000 — 36 792 000 2,0 % 2,0 % Official Journal 7 373 000 5 115 000 — 5 115 000 –30,6 % –30,6 % Title III 34 310 000 35 939 000 — 35 939 000 4,7 % 4,7 % Reflexion Group 1 060 000 533 000 — 533 000 –49,7 % –49,7 % Miscellaneous (Title II) 10 950 000 11 467 000 7 050 000 18 517 000 4,7 % 69,1 % Reserve 1 440 000 2 500 000 3 500 000 6 000 000 73,6 % 316,7 % Total (excl. acquisition) 587 852 001 595 052 002 23 500 000 618 552 002 1,2 % 5,2 % Acquisition of immovable property 15 000 000 15 000 000 — 15 000 000 — 0,0 % Grand total 602 852 000 610 052 000 23 500 000 633 552 000 1,2 % 5,1 %

3.2.4. Budget 2010 and the financial perspectives of Heading 5 of the EU budget

Table 3 gives an overview on the evolution of the Section II of the EU budget in 2005-2010. In 2005 and 2006, the development of the Council budget followed the development of Heading 5 of the financial perspectives.

Table 3

Evolution of the Section II of the EU budget (European Council and Council) under Heading 5 of the Financial Perspectives in 2005-2010

2005 2006 2007 2008 2009 (5) 2010 EUR million change EUR million change EUR million change EUR million change EUR million change EUR million change Heading 5 6 360 3,3 % 6 708 5,5 % 7 115 6,1 % 7 457 4,8 % 7 603 2,0 % 7 962 4,7 % ECC/Council budget 563 3,9 % 592 5,2 % 594 0,3 % 595 0,2 % 603 1,3 % 634 5,1 % Share in Heading 5 8,9 % 8,8 % –1,1 % 8,3 % –5,7 % 8,0 % –3,6 % 7,9 % –1,3 % 8,0 % 1,3 %

As a result of prudent budget management, reductions in the Council's share were gradually achieved in 2007, 2008 and 2009 (from 8,9 % in 2005 to 7,9 % in 2009).

The prudent budget management of the Council has continued in 2010, when the additional amounts related to the entry into force of the Treaty of Lisbon could be budgeted without increasing the share of the Section II of the EU budget (European Council and Council) compared to the Heading 5 development.

4. GLOBAL OVERVIEW OF BUDGET IMPLEMENTATION IN 2010

4.1. Activities and objectives in 2010

4.1.1. European Council and Council activities in 2010

In the framework of the financial activity report, the GSC provides some information on its core activities, which describe the functioning of the Council and European Council during the financial year.

Table 4 gives an overview of the development of the number of meetings organised by the GSC for the European Council and Council in 2003-2010. In addition to the 4 334‧institutional‧ meetings, the GSC has organised a further 2 000 internal meetings, training sessions, seminars, information sessions and briefings and meetings with third countries.

Table 4

Development of the number of meetings in 2003-2010

Institutional meetings 2003 2004 2005 2006 2007 2008 2009 2010 Summits (6) 6 5 3 3 3 5 7 7 Councils 77 76 80 76 68 81 74 78 Coreper 134 128 123 120 106 144 130 122 Working groups 4 333 3 971 3 918 4 037 4 183 4 480 4 272 4 272 Total 4 550 4 180 4 124 4 236 4 360 4 710 4 483 4 334 Other meetings 2 209 2 392 2 791 2 713 1 735 2 051 2 021 1 996 Grand total 6 759 6 572 6 915 6 949 6 095 6 761 6 504 6 330

Another quantitative indicator of activities are the legal acts published in the Official Journal (OJ) (Table 5). In 2010, 825 legal acts were published in the OJ. It should be noted that the volume of the legal acts depends on the finalisation of the legislative process before the acts can be elaborated into final texts for publishing in the OJ.

Table 5

Development of the number of legal acts in 2003-2010

2003 2004 2005 2006 2007 2008 2009 2010 Legal acts published in OJ 1 045 1 118 1 056 1 317 1 000 1 274 829 825

4.1.2. Achievement of administrative objectives in 2010

Achievement of the objectives established for the budget year 2010 may be summarised as follows:

— Efficient start-up and functioning of the European Council The GSC created new procedures, guidelines and instructions to ensure a prompt response to the new requirements of the European Council. From the beginning of 2010, the GSC also made staff available (mise à disposition) for the European Council to facilitate the start-up of the new institution.

— Consolidation of the organisation In 2010, the GSC recruited 275 officials (216 permanent officials and 59 temporary agents). During the year, 162 officials and 49 temporary agents left the Council, resulting in a net increase of 64 occupied posts in the ECC's establishment plan.

— Administrative modernisation As part of the administrative modernisation, the GSC renewed its electronic mail application and infrastructure to comply better with the other IT-applications used in the GSC and in the other institutions. The GSC also introduced a new system for internal mobility, which improves the matching of the requirements of posts with the competencies of staff. As a response to the economic crisis and in order to improve the cash flow position of European businesses, the European Commission proposed in April 2009 (7) to reduce the payment delay of invoices to 30 days. The GSC adapted its financial circuit in 2010 to comply with this Directive. The average payment delay of invoices was 27 days in the GSC in 2010.

— Building Policy The project to renovate the Résidence Palace and to convert it into the seat of the European Council and the Council of Ministers is at the stage where 60 % of the consolidation work of the building has been done. After the finalisation of the consolidation phase the actual construction work is planned to begin in the second half of 2011.

— Preparation to adapt to the consequences of the creation of the European External Action Service (EEAS) During 2010, the GSC prepared its organisation to meet the changes which the creation of the EEAS would bring in 2011. The letter of amendment (8) to the draft budget 2011, introduced on 17 September 2010, concerned a proposal to transfer resources from the Commission and from the Council to the European External Action Service. In terms of human resources, 411 establishment plan posts and in terms of appropriations EUR 79,7 million are transferred from the ECC budget to the EEAS for the financial year 2011.

4.2. Revenue

Table 6 gives an overview on the global outcome of revenue operations in 2010. The total volume of revenue operations in terms of established rights, i.e. issued recovery orders, was EUR 7,7 million less than in 2009. One of the most important explanations for this is that the financing of the European Council summits is covered by the ECC budget and no longer by the rotating Presidencies (impact of EUR 5-6 million/year).

Table 6

Overview of revenue in 2010 (by title)

(EUR) Title Established rights Recovered revenues To be recovered 4 Miscellaneous Community taxes, levies and dues 62 668 445 60 615 777 2 052 668 5 Revenue accruing from the administrative operation etc. 36 758 666 31 143 022 5 615 644 6 Contributions and repayments under community agreements etc. 1 088 215 1 088 215 7 Interest on late payments 561 561 9 Miscellaneous revenue 6 116 4 350 1 765 Total 100 522 003 92 851 925 7 670 078

The established rights (either carried over from 2009 or created in 2010), amounted to EUR 100,5 million. Of this amount, EUR 92,9 million (92 %) were recovered during the budget year whereas EUR 7,7 million (8 %) will be recovered in 2011.

4.2.1. Revenue accrued in 2010

The initial revenue estimate for the 2010 budget amounted to EUR 54 million (Table 7). During the budget year, an amount of EUR 93,9 million was recorded as established rights, of which EUR 86,7 million were recovered. The remaining amount of EUR 7,2 million will be collected in 2011.

Table 7

Revenue accrued during 2010 (by article)

(EUR) Article Initial revenue estimate Established rights Recovered revenues To be recovered 400 Proceeds from taxation on the salaries, etc. 25 038 000 23 733 867 23 732 517 1 351 404 Proceeds from the special levy on salaries 2 302 000 3 759 245 3 759 017 229 410 Staff contribution to the pension scheme 26 605 000 27 503 786 27 501 115 2 672 411 Transfer of purchase of pension rights by staff 6 490 827 4 545 769 1 945 058 500 Proceeds from the sale of movable property 6 710 6 710 511 Proceeds from letting and subletting immovable property 896 838 801 153 95 685 520 Revenue from investments, bank and other interests 205 077 204 916 161 550 Revenue from the supply of services and work etc. 149 787 129 838 19 949 551 Revenue from third parties in respect of services or work etc. 23 962 19 718 4 243 570 Revenue arising from the repayment of amounts etc. 27 980 702 23 085 971 4 894 731 571 Revenue earmarked for a specific purpose, etc. 573 Other contributions and refunds in connection with administrat. 2 019 997 1 793 793 226 204 580 Miscellaneous compensation 631 Contributions within the framework of the Schengen acquis 1 079 340 1 079 340 700 Interest on late payments 561 561 900 Miscellaneous revenue 4 350 4 350 Total 53 945 000 93 855 050 86 664 768 7 190 282

The positive difference between the initial estimate and the established rights (EUR 40 million) is mainly a result of:

— recovery of parts of the amounts paid to Member States in previous years for delegates’ travel expenses following their declarations for 2009 (EUR 24,9 million) (Article 570),

— the transfer of pension rights of 105 officials (EUR 6,5 million) (Article 411),

— recovery of payments by Member States for supplementary on-request interpretation into certain languages (EUR 2,4 million) (Article 570),

— contributions by other institutions and payments by Council officials for the Council crèche (EUR 0,6 million) (Article 573),

— payments by the European Data Protection Supervisor for translation services provided by the GSC (EUR 0,2 million) (Article 573),

— contributions to the administrative costs arising within the framework of the ‘Schengen acquis’ with Iceland and Norway (EUR 1,1 million) (Article 631).

4.2.2. Revenue accrued before 2010

In respect of outstanding recovery orders, an amount of EUR 6,7 million was carried over for recovery from 2009 to 2010. The amount carried over was almost 50 % lower than the year before. As shown in Table 8, EUR 6,2 million (93 %) of the outstanding amount were recovered in 2010 while EUR 0,5 million were carried over to 2011.

Table 8

Revenue accrued before 2010 (by article)

(EUR) Article Established rights prior 2010 Recovered revenues To be recovered 400 Proceeds from taxation on the salaries, etc. 1 735 1 476 260 404 Proceeds from the special levy on salaries 162 155 7 410 Staff contribution to the pension scheme 8 329 6 037 2 291 411 Transfer of purchase of pension rights by staff 1 170 493 1 069 692 100 800 500 Proceeds from the sale of movable property 383 383 511 Proceeds from letting and subletting immovable property 301 542 148 581 152 961 520 Revenue from investments, bank and other interests 550 Revenue from the supply of services and work etc. 4 172 4 172 551 Revenue from third parties in respect of services or work etc. 14 524 13 627 897 570 Revenue arising from the repayment of amounts etc. 4 843 122 4 759 117 84 006 571 Revenue earmarked for a specific purpose, etc. 573 Other contributions and refunds in connection with administrat. 311 407 175 041 136 366 580 Miscellaneous compensation 443 443 631 Contributions within the framework of the Schengen acquis 8 875 8 875 900 Miscellaneous revenue 1 765 1 765 Total 6 666 953 6 187 157 479 796

The recovery of revenue accrued before 2010 comes mainly from the following sources:

— EUR 1,1 million related to the transfer of pension rights (Article 411),

— EUR 3,8 million from the under-consumption of travel envelopes of the Member States in 2008 (Article 570),

— EUR 0,5 million for servicing and maintenance of IT equipment and software (Article 570),

— EUR 0,4 million as reimbursement of legal expenses (Article 570).

4.3. Expenditure in 2010

4.3.1. Overview of implementation of the budget in 2004-2010

Over the past 7 years, the global implementation rate of the Council/ECC budget has been around 94-97 % (Graph 1). In 2009, however, the Council budget was reduced by amending budget No 10/2009 to the EU budget by EUR 40 million. The amount was transferred as the Council's contribution to the European Economic Recovery Plan (EERP).

As can be seen in Graph 1, the payments during the financial year have increased in recent years whereas the overall amounts carried over to the following financial year have diminished.

Graph 1

Global budget implementation 2004-2010

The appropriations carried over break down into two major categories: functioning of the institution and building investments. The first is related to obligations duly contracted before the end of the budget year but where the goods have not been delivered yet and/or for which no invoices were received before the end of the year.

The second category refers to the GSC's acquisition of buildings such as LEX, the crèche and Résidence Palace. In the last few years, the GSC has been able to use the savings made during the budget implementation to finance these acquisitions. This in turn has significantly reduced the overall cost of the building projects, especially in terms of interest payments.

In 2010, two payments were made for the acquisition of the Résidence Palace building: EUR 15 million in February and EUR 40 million in December.

4.3.2. Implementation of the appropriations by category 2010

The analysis of expenditure in 2010 is presented at a level of the 12 most significant expenditure categories.

Table 9 compares the final budget after transfers (column 2) with the outturn of the budget in terms of commitments (column 3). The difference between the final budget and the committed appropriations corresponds to the amounts not used during the budget year 2010.

Table 9

Overview of the implementation of the 2010 budget (by category)

(EUR) Category Budget 2010 (initial) Budget 2010 (9) (final) Commitments Outturn rate Cancelled appropriations 1 2 3 4=3/2 5=2–3 Establishment plan 323 970 000 323 727 000 315 055 730 97,3 % 8 671 270 Other staff expenditure 23 512 000 23 512 000 21 480 604 91,4 % 2 031 396 Buildings (Title II) 39 917 000 39 602 000 37 707 683 95,2 % 1 894 317 Computer systems (Title II) 35 517 000 33 473 000 33 318 186 99,5 % 154 814 Interpreting costs 92 740 000 65 254 740 56 155 695 86,1 % 9 099 045 Delegations’ travel expenses 36 792 000 31 707 760 24 823 821 78,3 % 6 883 939 Official Journal 5 115 000 4 415 000 4 415 000 100,0 % — Title III 35 939 000 36 169 000 31 729 080 87,7 % 4 439 920 Reflexion Group 533 000 533 000 353 857 66,4 % 179 143 Miscellaneous (Title II) 18 517 000 14 158 500 12 816 290 90,5 % 1 342 210 Reserve 6 000 000 6 000 000 6 000 000 Total (excl. acquisition) 618 552 000 578 552 000 537 855 947 93,0 % 40 696 053 Acquisition of immovable property 15 000 000 55 000 000 55 000 000 100,0 % Grand total 633 552 000 633 552 000 592 855 947 93,6 % 40 696 053

The global implementation of the budget 2010, including the advance payments for the Résidence Palace building, is 93,6 %.

The difference between the initial budget estimates and implementation can be explained as follows:

— Due to the low occupation rate of posts on the establishment plan (on average 92 % (10)) an amount of EUR 4,7 million was not spent.

— The amount budgeted for the salary increase in 2010, which was based on the estimate (2,2 %) communicated by the Commission, was clearly higher than the actual adjustment (0,1 %) decided by the Council on 20 December 2010. Therefore an amount of EUR 4 million was not needed.

— It should be noted, however, that the salary increase from 1 July 2009 (increase of 1,85 % or EUR 8 million) was paid from the budget lines of this category. Without these payments the budget implementation in this category would have been lower by 2,5 %.

— Around 45 % (EUR 0,9 million) of the global saving of EUR 2 million in the category of other staff expenditure is due to a smaller spending on mission related costs. Fewer payments for seconded national experts, contractual agents and other outside services make up a saving of EUR 0,6 million. In addition, reduced needs for activities such as training count for EUR 0,1 million and for medical services EUR 0,1 million.

— In the category of building expenditure (in Title II, without the Résidence Palace) the unused amount of EUR 1,9 million is related to the rescheduling of certain security fitting-out work to 2011 (EUR 0,8 million) and to a smaller need for other fitting-out and installation work in the Council premises (EUR 0,7 million). Lower payments on rents and on contracts for prevention and surveillance explain another EUR 0,2 million.

— A sum of EUR 2,1 million in IT expenditure was saved due to a smaller need in: — outside assistance and consultancy (EUR 1,4 million), — servicing and maintenance of equipment and software (EUR 0,6 million), — telecommunications (EUR 0,1 million).

— Under-spending of EUR 36,6 million on interpretation results from: — a saving of EUR 16,5 million in general interpretation, — underuse of ‧on-request‧ envelopes by language, totalling EUR 20,1 million.

— The amount available for delegations’ travel expenses, after transfers, amounted to EUR 50 million. The initial budget was EUR 36,8 million to which EUR 13,2 million were transferred from the savings on the on-request interpreting envelopes (11). Since the Member States had to reimburse unused amounts from previous years, only EUR 24,8 million were committed for subsequent payments in the 2010 budget.

— The implementation of the appropriations for the Official Journal was EUR 0,7 million (14 %) lower than foreseen in the budget. The under-spending is a result of a new contract with the Publications Office of the European Union under which the price per page in 2010 decreased by 25 %.

— In Title III, the relatively low implementation rate is explained by the following factors: — the delay in implementing the SESAME project (EUR 2,8 million), — reduced need for building-related expenditure (EUR 0,5 million), — reduced need for mission and travel expenditure by delegates and SNEs (EUR 0,4 million).

The overall under-spending of the budget made it possible to reallocate EUR 40 million in addition to the EUR 15 million earmarked in the budget for advance payments for the Résidence Palace.

4.3.3. Modification of the budget in 2010

During the financial year 2010, the appropriations were reallocated by different transfers. Table 10 shows the decisions which modified the budget appropriations in 2008-2010.

Table 10

Budget modifications in 2008-2010

Modification Number Type Legal basis 2008 2009 2010 Amending budget FR Article 29 0 1 0 Transfer B FR Article 22 72 46 47 Transfer C FR Article 22 3 2 2 Transfer D FR Article 24 1 0 0 Total 76 49 49

The C-transfers, which involve informing of the budget authority (in accordance with Article 22(1)-(3) of the Financial Regulation), were made to reinforce the following subjects:

— C1-transfer on 29 October 2010: — maintenance works in the Council buildings (EUR 1 million), — building security and surveillance (EUR 0,3 million), — water, gas, electricity and heating (EUR 0,1 million).

— C2-transfer on 19 November 2010: — pre-financing of the Résidence Palace building (EUR 40 million), — allowances for seconded national military experts (EUR 0,2 million).

In 2010, the ECC budget was internally modified by 47 B-transfers based on Article 22(4) of the FR. Even though these transfers do not require prior notification of the budget authority, they have to be duly justified, both for the lines to which the appropriations are to be transferred and for those from which they are to be taken.

Table 11 gives an overview of the budget lines which were significantly (12) modified in 2010 by different transfers.

Table 11

Budget lines which were subject to significant transfers in 2010

(EUR) Item/Article Heading Transfer type Initial Budget 2010 Transfers Final appropriations Difference 1102 Entitlements under the Staff Regulations related to the personal circumstances of the staff member B 60 026 000 2 050 000 62 076 000 3 % 1106 Entitlements under the Staff Regulations related to entering the service, transfer and leaving the service B 5 540 000 –2 050 000 3 490 000 –37 % 1200 Other staff B 3 970 000 365 000 4 335 000 9 % 1201 National experts on secondment B 1 522 000 – 450 000 1 072 000 –30 % 2002 Acquisition of immovable property C 15 000 000 40 000 000 55 000 000 267 % 2003 Fitting-out of premises C 4 160 000 – 900 000 3 260 000 –22 % 2010 Cleaning and maintenance B,C 14 378 000 1 411 500 15 789 500 10 % 2011 Water, gas, electricity and heating B,C 5 086 000 – 914 500 4 171 500 –18 % 2012 Buildings security and surveillance B,C 8 410 000 367 000 8 777 000 4 % 2100 Acquisition of equipment and software B,C 7 925 000 512 100 8 437 100 6 % 2101 Outside assistance for the operation and development of computer systems B,C 17 996 000 – 540 100 17 455 900 –3 % 2102 Servicing and maintenance of equipment and software B,C 4 953 000 –1 278 000 3 675 000 –26 % 2103 Telecommunications B,C 4 643 000 – 738 000 3 905 000 –16 % 211 Furniture B,C 1 259 000 – 260 000 999 000 –21 % 2120 Purchase and replacement of technical equipment and installation B,C 2 635 000 –1 096 000 1 539 000 –42 % 2200 Travel expenses of delegations B,C 36 792 000 –5 084 240 31 707 760 –14 % 2202 Interpreting costs B,C 92 740 000 –27 485 260 65 254 740 –30 % 2204 Miscellaneous expenditure on internal expenses B,C 3 956 000 –1 897 166 2 058 834 –48 % 2211 Official Journal C 5 115 000 – 700 000 4 415 000 –14 % 3200 Acquisition of equipment and software B 6 700 000 – 716 000 5 984 000 –11 % 3202 Servicing and maintenance of equipment and software B 750 000 618 000 1 368 000 82 %

4.4. Appropriations carried over

4.4.1. Implementation of the carryover appropriations from 2009

As presented in Table 12, an amount of EUR 41 million was carried over from 2009 to 2010. Since 2007 the annual amount carried over has decreased from EUR 55 million to EUR 41 million in 2009 (reduction of 25 %).

Table 12

Implementation of appropriations carried over from 2009 (by category)

(EUR) Category Appropriations carried over from 2009 Payments 2010 Outturn rate Cancelled appropriations 1 2 3=2/1 4=1–2 Establishment plan 409 730 296 805 72,4 % 112 925 Other staff expenditure 2 906 972 1 966 167 67,6 % 940 805 Buildings (Title II) 10 350 850 8 940 101 86,4 % 1 410 749 Computer systems (Title II) 11 464 268 10 009 675 87,3 % 1 454 594 Interpreting costs 4 758 739 4 404 471 92,6 % 354 268 Delegations’ travel expenses — — — Official Journal 2 091 851 1 265 854 60,5 % 825 998 Title III 6 706 915 5 490 672 81,9 % 1 216 243 Reflexion Group 46 556 34 441 74,0 % 12 115 Miscellaneous (Title II) 2 326 494 1 833 125 78,8 % 493 369 Reserve — — — Total 41 062 375 34 241 310 83,4 % 6 821 065

The implementation rate of the appropriations carried over from 2009 was 83,4 %. Even though there is an increase in the implementation compared to the previous year, it is not yet globally at the expected level (> 95 %).

The main reasons for the low implementation rate are:

— Partial or complete lack of delivery of works/goods/services ordered by the GSC during the year.

— Invoices not received for works/goods/services delivered. It should be noted that this inevitably constitutes a budgetary burden for future years.

4.4.2. Appropriations carried over from 2010 to 2011

The appropriations carried over from 2010 to 2011 totalled EUR 49,8 million which is EUR 8,7 million more than the year before (Table 13).

Table 13

Implementation of appropriations carried over from 2010 to 2011 (by category)

(EUR) Category Budget 2010 (initial) Budget 2010 (13) (final) Commitments Appropriations carried over to 2011 Carry over rate 1 2 3 4 5=4/3 Establishment plan 323 970 000 323 727 000 315 055 730 458 005 0,1 % Other staff expenditure 23 512 000 23 512 000 21 480 604 3 750 088 17,5 % Buildings (Title II) 39 917 000 39 602 000 37 707 683 10 083 292 26,7 % Computer systems (Title II) 35 517 000 33 473 000 33 318 186 13 650 299 41,0 % Interpreting costs 92 740 000 65 254 740 56 155 695 6 082 706 10,8 % Delegations’ travel expenses 36 792 000 31 707 760 24 823 821 — 0,0 % Official Journal 5 115 000 4 415 000 4 415 000 2 411 962 54,6 % Title III 35 939 000 36 169 000 31 729 080 8 449 665 26,6 % Reflexion Group 533 000 533 000 353 857 68 310 19,3 % Miscellaneous (Title II) 18 517 000 14 158 500 12 816 290 4 807 312 37,5 % Reserve 6 000 000 6 000 000 — Total (excl. acquisition) 618 552 000 578 552 000 537 855 947 49 761 639 9,3 % Acquisition of immovable property 15 000 000 55 000 000 55 000 000 — Grand total 633 552 000 633 552 000 592 855 947 49 761 639 8,4 %

The increase of carried-over amounts in 2010 compared to 2009 come mainly from the following categories:

— other staff expenditure, especially mission appropriations by EUR 1,1 million,

— computer systems (Title II), particularly outside services and consultants by EUR 2,1 million,

— interpreting costs by EUR 1,3 million,

— IT-expenditure in Title III by EUR 2,5 million,

— miscellaneous (Title II): renewal of multimedia equipment in the conference rooms by EUR 1 million.

4.5. Assigned revenue

4.5.1. Assigned revenue accrued before 2010

The amount of assigned revenue accrued before 2010 totalled EUR 41,7 million. From this amount, EUR 40 million were committed, while EUR 1,7 million are carried over to 2011 (Table 14). The available amount at the end of the financial year 2010 was 70 % (EUR 4,3 million) lower than in 2009. Despite the positive development in the use of assigned revenue from before 2010, it should, in principle, be zero at the end of the budget year (FR Article 10).

Table 14

Implementation of assigned revenue accrued before 2010 (by category)

(EUR) Category Assigned revenues before 2010 Commitments Available assigned revenues 1 2 3=1–2 Establishment plan 1 813 471 1 813 471 — Other staff expenditure 3 015 226 2 172 592 842 634 Buildings (Title II) 1 686 125 1 634 793 51 332 Computer systems (Title II) 2 003 020 1 725 134 277 886 Interpreting costs 9 866 351 9 866 351 — Delegations’ travel expenses 18 982 681 18 982 681 — Official Journal 307 413 307 413 — Title III 1 594 362 1 086 505 507 857 Miscellaneous (Title II) 2 464 554 2 399 937 64 617 Reserve — — — Total 41 733 201 39 988 877 1 744 325

The amounts available at the end of 2010 concern mainly:

— other staff expenditure related to the crèches and childcare facilities EUR 0,7 million,

— computer systems, especially outside services and consultancy EUR 0,3 million,

— Title III, delegations’ travel envelopes in the framework of CSDP/PSDC EUR 0,5 million.

4.5.2. Assigned revenue accrued in 2010

Assigned revenue accrued in 2010 totalled EUR 32 million (Table 15). From this amount, EUR 4,7 million were used during the financial year while an amount of EUR 27,3 million was carried over to 2011 in accordance with Article 10 of the FR.

Table 15

Implementation of assigned revenue accrued in 2010 (by category)

(EUR) Category Assigned revenues 2010 Commitments Available assigned revenues 1 2 3=1–2 Establishment plan 1 230 778 1 230 778 Other staff expenditure 1 216 173 7 865 1 208 308 Buildings (Title II) 978 547 356 001 622 546 Computer systems (Title II) 892 045 191 624 700 421 Interpreting costs 2 227 077 2 227 077 Delegations’ travel expenses 23 359 896 3 654 819 19 705 077 Official Journal 250 228 250 228 Title III 1 038 349 49 673 988 675 Miscellaneous (Title II) 837 496 425 038 412 459 Reserve — — — Total 32 030 590 4 685 020 27 345 569

The majority (76 %) of the assigned revenue is related to the delegations’ travel expenses (EUR 23,4 million in Title II and EUR 0,9 million in Title III). The amount of EUR 2,2 million in interpretation comes from the top-up payments on certain languages.

The remainder is mainly related to the reimbursement of amounts by other institutions on various activities and systems such as participation to the common financial system with the Council, contributions to occupy places in the Council crèche and other contributions and refunds connected with the administrative operations of the Council.

(1) Article 316 of the TFEU: ‧The expenditure of the European Parliament, the European Council and the Council, the Commission and the Court of Justice shall be set out in separate parts of the budget, without prejudice to special arrangements for certain common items of expenditure.‧

(2) Inflation in 2009-2010: 2,0 %, adjustment of remuneration and envelopes for interpretation 2,2 %.

(3) In 2009, the reserve was reduced by EUR 1,06 million to finance the work of the Reflection Group.

(4) Total impact of the letter of amendment (15639/1/09) to the preliminary draft budget 2010 of the Council of EUR 25 million includes EUR 23,5 million as an increase + EUR 1,5 million as earmarked funds from the EUR 2,5 million reserve.

(5) The final budget after the reduction of EUR 40 million for the European Economic Recovery Plan in December 2009 was EUR 563 million.

(6) European Councils and 1 summit with the Heads of State and Governments of the Euro Zone in 2010.

(7) Directive (COM(2009) 126 final) of the European Parliament and of the Council on combating late payment in commercial transactions.

(8) 14329/10 FIN 428: Letter of amendment No 1 to the draft budget for 2011.

(9) Includes internal reallocations of appropriations.

(10) In 2009, the average occupation rate was 91 %. A flat rate reduction of 7 % was applied to the relevant appropriations in both years.

(11) In conformity with Decision 111/07, the GSC transfers 66 % of the unused amounts to the delegates’ travel envelopes to be used during the same budget year. In 2010, this corresponded to an amount of EUR 13,2 million.

(12) Net amount > EUR 250 000.

(13) Includes internal reallocations of appropriations.