EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

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 2020, based on Article 6 of the MFF Regulation, the absolute amount of the Contingency Margin for the year 2020 is set at EUR 5 096,8 million.

The Commission submits today Draft Amending Budget (DAB) No 5/2020 to continue providing support to refugees and host communities in response to the Syria crisis in Jordan, Lebanon and Turkey. Under heading 4 (Global Europe), the Commission proposes in this DAB to allocate, in commitment appropriations, EUR 100 million as resilience support to refugees and host communities in Jordan and Lebanon and EUR 485 million to ensure the continuation of the urgent humanitarian support to refugees in Turkey.

After having carried out a detailed analysis of the possibility to reallocate significant amounts within heading 4 (Global Europe), the Commission concluded that there is no room for redeployments in 2020. The unallocated margin still available under this heading (EUR 103,4 million) just allows the financing of EUR 100 million in commitment appropriations to support for resilience to host communities in Jordan and Lebanon. The remaining portion of this margin (EUR 3,4 million) is however largely insufficient to cover the urgent humanitarian support to refugees in Turkey.

Because of the full exhaustion of the envelopes of the other two special instruments of the MFF Regulation (Global Margin for Commitments and Flexiblity Instrument), the Commission proposes, as a last resort, to mobilise the Contingency Margin for 2020 for an amount of EUR 481,6 million to ensure the full financing of commitment appropriations related to expenditure under heading 4 in the general budget of the European Union for the financial year 2020, over and above the commitment ceiling.

2.JUSTIFICATION OF THE MOBILISATION

2.1.INTRODUCTION

Under the EU-Turkey Statement, the Commission and Member States committed in two tranches EUR 6 billion in EU assistance to refugees in Turkey for 2016-2019, delivered through the Facility for Refugees in Turkey. The operational envelope of this funding has been committed in full and the contracting will be finalised in the course of 2020. Disbursements reached EUR 3,2 billion as of end-April 2020.





The second tranche of EUR 3 billion has been programmed to ensure Facility sustainability and a gradual, managed take-over of Facility-funded initiatives by the Turkish authorities. However, Turkish authorities are not yet able to continue to provide the support required to the around 4 million refugees in Turkey in the medium- to long-term. At the March 2019 EU-Turkey Association Council, Turkey requested EU support beyond the Facility to support refugees. Several Member States also asked to continue support to refugees in Turkey in recent months. Due to the COVID-19 outbreak, the economic situation in Turkey is deteriorating and vulnerable refugees are among the hardest hit by the crisis.

Against this background and in order to avoid a discontinuation of the two projects with severe humanitarian and political consequences, there is an urgent need to provide the necessary means to fund the continuation of the two main EU humanitarian support actions, the Emergency Social Safety Net (ESSN) and the Conditional Cash Transfer for Education (CCTE).

The ESSN, that provides monthly cash transfers to some 1,7 million refugees, is expected to run out of money in March 2021 at the latest and EUR 400 million is needed to extend it until the end of 2021.

The CCTE provides cash to refugee families whose children attend school instead of working. The current contract for CCTE ends in September 2020 and EUR 85 million is urgently needed in order to allow the programme to run for an additional year up to the end of December 2021.

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 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 heading 4 (Global Europe) but concluded there is no scope for further redeployment in 2020.

Since the unallocated margin available under this heading (EUR 3,4 million) is insufficient to finance the proposed increase of commitment appropriations (and because both the Flexibility instrument and the Global margin for commitments have already been fully exhausted in 2020, the mobilisation of the Contingency Margin is the only available – the last resort – instrument to finance the remaining additional expenditure above the ceiling of heading 4 as proposed in DAB No 5/2020.

2.3.BUDGETARY IMPACT OF UNFORESEEN CIRCUMSTANCES IN 2020

The Commission proposes to mobilise EUR 481,6 million through the Contingency Margin to cover the additional needs related to the continuation of urgent humanitarian support to refugees in Turkey.