EN

Brussels, 18.10.2006

COM(2006) 612 final

COMMUNICATION FROM THE COMMISSION

EUROPEAN DEVELOPMENT FUND (EDF)

Estimate of commitments and payments and of contributions to be paid by the Member States for 2006 and 2007, and

Forecast of commitments and payments for 2008 to 2011

Introduction

The Commission draws up this communication to the Council each year in accordance with Article 8 of the Financial Regulation applicable to the 9th European Development Fund (EDF) [1]. Its purpose is to provide an estimate of commitments and payments for the current financial year (2006) and the following financial year (2007) and set out the schedule of calls for contributions, taking into account the forecasts of the European Investment Bank (EIB). As provided for in Article 8 of the Financial Regulation, the communication also gives estimates of commitments and payments for each of the following four years (2008 to 2011).

Since the entry into force of the 9th EDF in 2003 the Member States have made direct contributions to the EIB for the instruments it manages (the Investment Facility and interest-rate subsidies), while contributions for the old instruments managed by the EIB (risk capital and interest-rate subsidies) still go through the Commission. This communication therefore makes a clear distinction between EIB payments under the 9th EDF, and Commission payments (including those for the old instruments managed by the EIB).

In line with the joint statement made by the Council and Commission when the Financial Regulation applicable to the 9th EDF was adopted, this document consists mainly of tables.

The graph below shows an overview of the trend in commitments and payments, made in the past and expected in the near future (Commission [2] and EIB). It clearly indicates the upwards structural trend in payments since 2000.

(...PICT...)

- - Commitments ― Payments

1. Commitments and payments estimated for 2006 and 2007

The Commission and the EIB have updated their forecasts of commitments and payments for 2006 and 2007 for each of the ACP [3] countries and OCTs [4]. For the Commission, these figures are the result of a detailed estimate, project by project. Following its experience on the Investment Facility, the EIB bases its estimates on a projection of the rate of commitments and payments observed in the past.

The payment estimates in particular have been compiled with great care with the aim of helping the Member States to earmark amounts that are as accurate as possible in their national budgets while ensuring that sufficient financial resources are available for the EDF to avoid liquidity problems.

For the Commission, the overall estimates for 2006 and 2007, presented in June [5], are confirmed. With commitments totalling EUR 3 400 million and payments EUR 2 750 million, the Commission believes it will be able to achieve its objectives for 2006. The level of commitments for 2007 (EUR 3 450 million) confirms the Commission’s wish to use up all the funds made available by the 9th EDF (including the balances remaining from previous EDFs). With EUR 2 850 million in payments in 2007, the upward trend observed since 2000 is confirmed.

The EIB revised its estimates for 2006 very slightly downwards. The new figures for commitments and payments are EUR 576 million and EUR 290 million respectively. For 2007, commitments are put at EUR 385 million. The downward adjustment is greater for payments, which are now estimated at EUR 350 million.

The table in Annex 1 shows the new estimates for commitments and payments for 2006 and 2007, and compares them to the figures presented in the communication of June 2006.

In accordance with Article 8 of the Financial Regulation applicable to the 9th EDF, the estimates will be revised in the June 2007 communication.

2. Calls for contributions in 2006 and 2007

Annex 2 gives an overview of the financial situation for 2006 and 2007 and shows the total contributions payable into the EDF by the Member States.

It should be recalled that two types of measures do not require additional financial resources from the Member States. The related payments are therefore not included in this table. These are the Stabex instrument, for which Member States have already made the necessary payments in the past, and measures financed from a special account to accompany the elections in the Democratic Republic of Congo.

Because the estimates for payments for 2006 have changed only slightly since June, the EIB and the Commission maintain their request for the third tranche of contributions at EUR 20 million and EUR 200 million respectively. Total contributions requested by the Commission and the EIB for the whole year are EUR 2 690 million, well within the amount indicated by the Council in December 2005 [6] (EUR 2 830 million). Annex 3 gives a breakdown of contributions by Member State.

For 2007, the Commission calls on the Member States to pay a total of EUR 2 640 for the whole year. It proposes an initial tranche of EUR 1 500 million (compared with EUR 1 400 million in 2005). This is in line with the Commission objective to spread payments across the year more effectively and therefore decrease the payments made towards the end of the year. In line with its forecast downwards revision in payments, the EIB estimates a need for contributions totalling EUR 330 million, with EUR 130 million payable for the first tranche.

Current estimates from the Commission and the EIB for the second tranche of 2007 contributions are for EUR 850 million and EUR 160 million respectively. The last tranche should therefore require EUR 290 million and EUR 40 million respectively. In accordance with the 9th EDF Financial Regulation, the second and third tranches may be adjusted upwards or downwards in line with real requirements at the time of the call for contributions.

3. The future (2008-2011)

It should be remembered that the margin of error for medium-term estimates is high. This is particularly true at the moment. In 2008, the 10th EDF will come into operation. At this stage, the programming of the 10th EDF has not even been established yet. The following figures should therefore be interpreted with a great deal of caution.

Forecast EDF commitments and payments

2008-2011

€ million

| | 2008 | 2009 | 2010 | 2011 |

Commitments | | | | |

| Commission | 2900 | 3750 | 3750 | 3750 |

| EIB | 587 | 450 | 450 | 450 |

| Total | 3487 | 4200 | 4200 | 4200 |

Payments | | | | |

| Commission | 3200 | 3000 | 3200 | 3400 |

| EIB | 430 | 560 | 460 | 410 |

| Total | 3630 | 3560 | 3660 | 3810 |

ANNEX 1

Commitments/Payments Estimated for 2006 and 2007 (€ million)

| | 2006 | 2007 |

| | CommunicationJune 2006 | Update | CommunicationJune 2006 | Update |

COMMITMENTS | | | | |

| Peace Facility | 50 | 50 | 0 | 0 |

| Water Facility | 185 | 289 | 190 | 86 |

| Other measures from the conditional billion | 326 | 326 | 174 | 174 |

| Stabex (interest on secured accounts) | 10 | 10 | 10 | 10 |

| Other | 2.829 | 2.725 | 3.076 | 3.180 |

| Total for the Commission | 3.400 | 3.400 | 3.450 | 3.450 |

| Investment Facility | 526 | 526 | 295 | 295 |

| Interest-rate subsidies | 60 | 50 | 100 | 90 |

| Total for EIB instruments (9th EDF) | 586 | 576 | 395 | 385 |

| TOTAL | 3.986 | 3.976 | 3.845 | 3.835 |

PAYMENTS | | | | | |

| Peace Facility | 124 | 124 | 12 | 12 |

| Water Facility | 44 | 69 | 89 | 107 |

| Other measures from the conditional billion | 60 | 60 | 188 | 183 |

| Risk capital (+ interest-rate subsidies) | 82 | 75 | 71 | 71 |

| Debt relief (HIPC) | 60 | 60 | 100 | 100 |

| Other | 2.297 | 2.262 | 2.300 | 2.234 |

| Subtotal | 2.667 | 2.650 | 2.760 | 2.707 |

| Stabex | 83 | 100 | 90 | 127 |

| DR Congo | 0 | 0 | 0 | 16 |

| Total for the Commission | 2.750 | 2.750 | 2.850 | 2.850 |

| Investment Facility | 270 | 250 | 330 | 300 |

| Interest-rate subsidies | 45 | 40 | 80 | 50 |

| Total for EIB instruments (9th EDF) | 315 | 290 | 410 | 350 |

| TOTAL | 3.065 | 3.040 | 3.260 | 3.200 |

ANNEX 2

Financial situation estimated for 2006 and 2007 – not including Stabex and the DR Congo special account(*) (€ million)

| | Communication of June 2006 | Update |

| | Commission | EIB | TOTAL | Commission | EIB | TOTAL |

| | | 9th EDF | | | 9th EDF | |

2006 | Balance at 01.01.06 | 137** | 141 | 278 | 138** | 142 | 280 |

| 2005 contributions paid in 2006 | 14 | | 14 | 14 | | 14 |

| 2006 contributions, of which: | 2.510 | 180 | 2.690 | 2.510 | 180 | 2.690 |

| First tranche | 1.400 | 60 | 1.460 | 1.400 | 60 | 1.460 |

| Second tranche | 910 | 100 | 1.010 | 910 | 100 | 1.010 |

| Third tranche | 200 | 20 | 220 | 200 | 20 | 220 |

| Interest and other revenue | 10 | | 10 | 12 | | 12 |

| Recoveries | 60 | | 60 | 50 | | 50 |

| Payments | -2.667 | -315 | -2.982 | -2.650 | -290 | -2.940 |

| Balance at 31.12.06 | 64 | 6 | 70 | 74 | 32 | 106 |

2007 | 2007 contributions | 2.690 | 410 | 3.100 | 2.640 | 330 | 2.970 |

| First tranche | | | | 1.500 | 130 | 1.630 |

| Second tranche | | | | 850 | 160 | 1.010 |

| Third tranche | | | | 290 | 40 | 330 |

| Interest and other revenue | 10 | | 10 | 12 | | 12 |

| Recoveries | 60 | | 60 | 60 | | 60 |

| Payments | -2.760 | -410 | -3.170 | -2.707 | -350 | -3.057 |

| Balance at 31.12.07 | 64 | 6 | 70 | 79 | 12 | 91 |

* Funds available for operations | ** Does not include EUR 1.4 million from 2006 contributions |

ANNEX 3

2006 EDF Contributions by Member State (in euros)

Member State | SCALE | 1st tranche | 2nd tranche | 3rd tranche | TOTAL |

| | paid to | paid to | paid to | paid to | payable to | payable to | for all |

| % | EIB | Commission | EIB | Commission | EIB | Commission | tranches |

GERMANY | 23,36 | 14.016.000 | 327.040.000 | 23.360.000 | 212.576.000 | 4.672.000 | 46.720.000 | 628.384.000 |

BELGIUM | 3,92 | 2.352.000 | 54.880.000 | 3.920.000 | 35.672.000 | 784.000 | 7.840.000 | 105.448.000 |

DENMARK | 2,14 | 1.284.000 | 29.960.000 | 2.140.000 | 19.474.000 | 428.000 | 4.280.000 | 57.566.000 |

SPAIN | 5,84 | 3.504.000 | 81.760.000 | 5.840.000 | 53.144.000 | 1.168.000 | 11.680.000 | 157.096.000 |

FRANCE | 24,30 | 14.580.000 | 340.200.000 | 24.300.000 | 221.130.000 | 4.860.000 | 48.600.000 | 653.670.000 |

GREECE | 1,25 | 750.000 | 17.500.000 | 1.250.000 | 11.375.000 | 250.000 | 2.500.000 | 33.625.000 |

IRELAND | 0,62 | 372.000 | 8.680.000 | 620.000 | 5.642.000 | 124.000 | 1.240.000 | 16.678.000 |

ITALY | 12,54 | 7.524.000 | 175.560.000 | 12.540.000 | 114.114.000 | 2.508.000 | 25.080.000 | 337.326.000 |

LUXEMBOURG | 0,29 | 174.000 | 4.060.000 | 290.000 | 2.639.000 | 58.000 | 580.000 | 7.801.000 |

NETHERLANDS | 5,22 | 3.132.000 | 73.080.000 | 5.220.000 | 47.502.000 | 1.044.000 | 10.440.000 | 140.418.000 |

PORTUGAL | 0,97 | 582.000 | 13.580.000 | 970.000 | 8.827.000 | 194.000 | 1.940.000 | 26.093.000 |

UNITED KINGDOM | 12,69 | 7.614.000 | 177.660.000 | 12.690.000 | 115.479.000 | 2.538.000 | 25.380.000 | 341.361.000 |

AUSTRIA | 2,65 | 1.590.000 | 37.100.000 | 2.650.000 | 24.115.000 | 530.000 | 5.300.000 | 71.285.000 |

FINLAND | 1,48 | 888.000 | 20.720.000 | 1.480.000 | 13.468.000 | 296.000 | 2.960.000 | 39.812.000 |

SWEDEN | 2,73 | 1.638.000 | 38.220.000 | 2.730.000 | 24.843.000 | 546.000 | 5.460.000 | 73.437.000 |

TOTAL | 100,00 | 60.000.000 | 1.400.000.000 | 100.000.000 | 910.000.000 | 20.000.000 | 200.000.000 | 2.690.000.000 |

ANNEX 4

2007 EDF Contributions by Member State (in euros)

Member State | SCALE | 1st tranche | 2nd tranche | 3rd tranche | TOTAL |

| | payable to | payable to | payable to | payable to | payable to | payable to | for all |

| % | EIB | Commission | EIB | Commission | EIB | Commission | tranches |

GERMANY | 23,36 | 30.368.000 | 350.400.000 | 37.376.000 | 198.560.000 | 9.344.000 | 67.744.000 | 693.792.000 |

BELGIUM | 3,92 | 5.096.000 | 58.800.000 | 6.272.000 | 33.320.000 | 1.568.000 | 11.368.000 | 116.424.000 |

DENMARK | 2,14 | 2.782.000 | 32.100.000 | 3.424.000 | 18.190.000 | 856.000 | 6.206.000 | 63.558.000 |

SPAIN | 5,84 | 7.592.000 | 87.600.000 | 9.344.000 | 49.640.000 | 2.336.000 | 16.936.000 | 173.448.000 |

FRANCE | 24,30 | 31.590.000 | 364.500.000 | 38.880.000 | 206.550.000 | 9.720.000 | 70.470.000 | 721.710.000 |

GREECE | 1,25 | 1.625.000 | 18.750.000 | 2.000.000 | 10.625.000 | 500.000 | 3.625.000 | 37.125.000 |

IRELAND | 0,62 | 806.000 | 9.300.000 | 992.000 | 5.270.000 | 248.000 | 1.798.000 | 18.414.000 |

ITALY | 12,54 | 16.302.000 | 188.100.000 | 20.064.000 | 106.590.000 | 5.016.000 | 36.366.000 | 372.438.000 |

LUXEMBOURG | 0,29 | 377.000 | 4.350.000 | 464.000 | 2.465.000 | 116.000 | 841.000 | 8.613.000 |

NETHERLANDS | 5,22 | 6.786.000 | 78.300.000 | 8.352.000 | 44.370.000 | 2.088.000 | 15.138.000 | 155.034.000 |

PORTUGAL | 0,97 | 1.261.000 | 14.550.000 | 1.552.000 | 8.245.000 | 388.000 | 2.813.000 | 28.809.000 |

UNITED KINGDOM | 12,69 | 16.497.000 | 190.350.000 | 20.304.000 | 107.865.000 | 5.076.000 | 36.801.000 | 376.893.000 |

AUSTRIA | 2,65 | 3.445.000 | 39.750.000 | 4.240.000 | 22.525.000 | 1.060.000 | 7.685.000 | 78.705.000 |

FINLAND | 1,48 | 1.924.000 | 22.200.000 | 2.368.000 | 12.580.000 | 592.000 | 4.292.000 | 43.956.000 |

SWEDEN | 2,73 | 3.549.000 | 40.950.000 | 4.368.000 | 23.205.000 | 1.092.000 | 7.917.000 | 81.081.000 |

TOTAL | 100,00 | 130.000.000 | 1.500.000.000 | 160.000.000 | 850.000.000 | 40.000.000 | 290.000.000 | 2.970.000.000 |

[1] OJ L 83, 1.4.2003, p. 1.

[2] The commitments and payments for the Commission are “gross” figures, i.e. they do not take account of decommitments and recoveries.

[3] African, Caribbean and Pacific States.

[4] Overseas Countries and Territories.

[5] Communication from the Commission to the Council: Financial information on the European Development Funds (COM(2006) 317 final of 19 June 2006).

[6] Council Decision of 21 December 2005 laying down, for the financial year 2006, the schedule of calls for contributions from the Member States to the 9th European Development Fund.

--------------------------------------------------