EUROPEAN COMMISSION Brussels, 26.6.2015 COM(2015) 317 final AMENDING LETTER N° 1

TO THE DRAFT GENERAL BUDGET 2016 FINANCING OF THE ESFI GUARANTEE FUND



Having regard to: –the Treaty on the Functioning of the European Union, and in particular Article 314 thereof, in conjunction with the Treaty establishing the European Atomic Energy Community, and in particular Article 106a thereof, –the Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the Financial Regulation applicable to the general budget of the Union, and in particular Article 39 thereof, –the draft general budget of the European Union for the financial year 2016 adopted by the Commission on 24 June 2015, the European Commission hereby presents to the budgetary authority the amending letter No 1 to the draft general budget of the European Union for the financial year 2016 for the reasons set out in the explanatory memorandum. STATEMENT OF REVENUE AND EXPENDITURE BY SECTION The changes to the statement of revenue and expenditure by section are available on EUR-Lex ( http://eur-lex.europa.eu/budget/www/index-en.htm ). An English version of the changes to this statement is attached for information as a budgetary annex. TABLE OF CONTENTS 1 Introduction 2 Adoption of EFSI legal basis: completing the EFSI budget structure 2.1 Entering appropriations on the line 2.2 Creating a new budget line for EIF fees 3 Political agreement EFSI: consequences for financing in 2016 3.1 Reduced redeployment from Connecting Europe Facility 3.2 Reduced redeployment from Horizon 2020 3.3 Additional use of the margins 3.4 No additional need for payment appropriations

4 Conclusion 5 Summary table by heading of the multiannual financial framework 1Introduction This Amending Letter No 1 (AL1) to the draft budget for the year 2016 reflects the budgetary impact of the political agreement on the financing of the EFSI Guarantee Fund reached between the European Parliament and the Council on 28 May 2015, which facilitated the adoption of the Regulation on the European Fund for Strategic Investments (EFSI) on 24 June 2015. The adoption of the EFSI basic act means that the corresponding appropriations for the provisioning of the Guarantee Fund and the funding of the European Investment Advisory Hub (EIAH) and European Investment Project Portal (IPP) can be transferred from the reserve to the operational lines. In addition, the Commission proposes to complete the budget structure for the EFSI by creating a new budget article 01 04 07, with a token entry (p.m.), in view of a possible contribution from the EU budget to supplement the fees covering the work carried out by the European Investment Fund (EIF) in the implementation of the new financial instruments under the EFSI. Overall, the political agreement reduced by EUR 1 billion the redeployment of commitment appropriations from the Horizon 2020 and Connecting Europe Facility (CEF) programmes as initially proposed by the Commission as part of its legislative proposal for the creation of the EFSI, to be compensated by a corresponding increase in the use of the unallocated margin under heading 1a and the Global Margin for Commitments. As part of the political agreement, the Commission stated that it would analyse the potential impact of the contributions to the EFSI from the different budget lines of Horizon 2020 on the effective implementation of the respective programmes. Consequently, in this Amending Letter the Commission proposes to reduce the 2016 redeployment from a number of budget lines under Horizon 2020 and the Connecting Europe Facility. This leads to an increase of the commitment appropriations for Horizon 2020 by an amount of EUR 153 million and an increase of the commitment appropriations for the Connecting Europe Facility (transport) by an amount of EUR 150 million. This will be offset by a corresponding increase in the use of the available margins for the provisioning of the EFSI Guarantee Fund: a decrease of the 2016 unallocated margin under heading 1a by EUR 111,4 million and an increase in the use of the Global Margin for Commitments by EUR 191,6 million. The net impact of these changes is an increase of EUR 303 million in commitment appropriations compared to the draft budget 2016. The overall level of payments remains unchanged. 2Adoption of EFSI legal basis: completing the EFSI budget structure 2.1Entering appropriations on the line In accordance with Article 54 of the Financial Regulation, in the 2016 draft budget the Commission placed the EFSI appropriations in the reserve, awaiting the adoption of the EFSI legal basis. Now that the legal basis has been adopted, the appropriations can be entered on the operational lines, as follows: -01 04 05: Provisioning of the EFSI Guarantee Fund: EUR 2 030 million in commitment appropriations and EUR 500 million in payment appropriations; -01 04 06: European Investment Advisory Hub (EIAH) and European Investment Project Portal (IPP): EUR 20 million in commitment and payment appropriations. 2.2Creating a new budget line for EIF fees The Commission proposes to complete the budget structure for the EFSI by creating a new budget article 01 04 07 'Fees due to the European Investment Fund for increased assistance under the European Fund for Strategic Investments', with a token entry (p.m.). The European Investment Fund (EIF) will provide assistance in the implementation of the new financial instruments under the EFSI, such as the Growth Equity and co-investment facilities. The role of the EIF will be essential in ensuring a swift implementation of the new financial instruments. The EIF will be entitled to receive performance fees, start-up fees and some administrative fees from the European Investment Bank (EIB). As foreseen by the EFSI Regulation, such fees may be met by the general budget of the Union to the extent they are not deducted from the remuneration or from revenues, recoveries or other payments received by the EIF. However, very limited revenues are expected to materialise at the beginning of 2016, while costs incurred by the EIF will increase consistently in parallel with the speeding up of the implementation of new instruments. With this in mind, the new budget article is proposed in order to cope with a possible insufficiency of revenues, in case of need. 3Political agreement EFSI: consequences for financing in 2016 3.1Reduced redeployment from Connecting Europe Facility As part of the political agreement on the financing of the EFSI Guarantee Fund reached on 28 May 2015, the European Parliament and the Council agreed to reduce the overall contribution from the transport strand of the Connecting Europe Facility (CEF-transport) to the financing of the EFSI Guarantee Fund by EUR 500 million. The agreement also included that this amount should be added exclusively to the budget lines implementing CEF-transport grants. In order to ensure a smooth annual profile, it is proposed to re-instate EUR 150 million in the year 2016 and to allocate this amount over the three budget lines of the CEF-transport (grants) in proportion to the contributions to EFSI included in the original Commission proposal.