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Brussels, 15.4.2011

COM(2011) 199 final

COMMUNICATION FROM THE COMMISSIONTO THE EUROPEAN PARLIAMENT AND THE COUNCIL

Technical adjustment of the financial framework for 2012 in line with movements in GNI (Point 16 of the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management)

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

Technical adjustment of the financial framework for 2012 in line with movements in GNI (Point 16 of the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management)

INTRODUCTION

The Interinstitutional Agreement (IIA) of 17 May 2006 on budgetary discipline and sound financial management (OJ C 139/1 of 14/06/2006) contains the financial framework table for EU-27 for the period 2007-2013, expressed in 2004 prices (Table 1).

According to Point 16 of the IIA, the Commission makes each year, ahead of the budgetary procedure for year n+1, a technical adjustment to the financial framework in line with movements in the EU's gross national income (GNI) and prices and communicates the results to the two arms of the budgetary authority. As far as prices are concerned, expenditure ceilings at current prices are established using the fixed 2% deflator foreseen in point 16 of the IIA. As far as movements in GNI are concerned, the present Communication includes the latest economic forecasts available.

The purpose of this communication is to present to the budgetary authority the result of the technical adjustment (EU-27) for 2012 according to Point 16 of the IIA.

TERMS OF THE ADJUSTMENT OF THE FINANCIAL FRAMEWORK TABLE (TABLES 1-2)

Table 1 shows the financial framework for EU-27 in 2004 prices as modified in accordance with point 17 of the IIA (COM(2010) 160 of 16 April 2010).

Table 2 shows the financial framework for EU-27 adjusted for 2012 (i.e. in current prices, unchanged as compared to the adjustment for 2011 and point 17, see COM(2010) 160, except that the financial framework expressed in percentage of GNI is updated with the latest economic forecasts available).

Total figure for GNI

According to the latest forecast available, the GNI for 2012 is established at EUR 13 114 511 million in current prices for EU-27 (according to the last paragraph of Point 16 no technical adjustments are made in respect of the current year or the past ones; for information only, the updated GNI is established at EUR 12 650 080 million for 2011, at EUR 12 218 528 million for 2010, at EUR 11 626 995 million for 2009, EUR 12 312 555 million for 2008 and EUR 12 243 045 million for 2007).

For 2013 the EU-27 GNI has been calculated on the basis of internal Commission projections for the annual average growth rate in real terms. These projections are indicative and will be updated annually on the basis of the latest economic forecasts available.

Since 2010 GNI includes financial intermediation services indirectly measured (FISIM) based on Council Decision 2010/196/EU, Euratom of 16 March 2010 to apply FISIM for own resources purposes[1] from 1 January 2010 onwards.

Main results of the technical adjustment of the Financial Framework for 2012 (EU-27)

The overall ceiling on commitment appropriations for 2012 (EUR 147 546 million) equals 1.13 % of GNI.

The corresponding overall ceiling concerning the payment appropriations (EUR 141 360 million) equals 1.08 % of GNI. On the basis of the latest economic forecasts, this leaves a margin beneath the 1.23 % own resources ceiling of EUR 19 948 million (0.15 % of GNI for EU-27).

The ceilings for own resources and for commitment appropriations were adapted following the entry into force of Decision 2010/196 to apply FISIM for own resources purposes[2].

OTHER ELEMENTS LINKED TO THE TECHNICAL ADJUSTMENT

Heading 5 (Administration)

In the case of heading 5, a footnote to the financial framework states that the figures for pensions included under the ceiling for this heading are to be calculated net of staff contributions to the pension scheme, up to a maximum of EUR 500 million (2004 prices) for the period 2007-2013. This provision should be interpreted as imposing a dual limit on the amounts deducted from expenditure on pensions when applying the ceiling of the heading:

- This amount may not exceed the contributions actually entered as budget revenue in any one year;

- The accumulated total of deductions for the period 2007-2013 may not exceed EUR 500 million at 2004 prices, equivalent to an average of EUR 71.4 million (EUR 84.0 million at 2012 prices).

The recurrent nature of administrative expenditure imposes that an average limit is adopted annually to avoid using a margin at the start of the period which would no longer be fully available afterwards. For 2012 the amount to be deducted is EUR 84.0 million at current prices.

Expenditure items outside the financial framework 2007-2013

A number of instruments are available outside expenditure ceilings agreed in the financial framework 2007-2013. These instruments aim at providing rapid response to exceptional or unforeseen events, and provide some flexibility beyond the agreed expenditure ceilings within certain limits:

- the Emergency Aid reserve , which can be mobilised up to a maximum amount of EUR 221 million per year in 2004 prices, or EUR 258.9 million in 2012 at current prices (EUR 1 744 million for the whole period in current prices);

- the EU Solidarity Fund , whose maximum annual amount in current prices is EUR 1 billion;

- the Flexibility Instrument , with a maximum annual amount in current prices of EUR 200 million, plus the portion of the unused annual amounts of the years 2010-2011, which may be carried over to year 2012;

In addition, it will be possible to mobilise the European Globalisation Adjustment Fund (EGF) up to a maximum of EUR 500 million per year in current prices by drawing from any margin existing under the global ceiling for commitment appropriations of the previous year, and/or from cancelled commitments from the previous two years (excluding those related to heading 1b).

OPERATIONS OUTSIDE THE BUDGET AND OWN RESOURCES

The fourth subparagraph of Point 11 of the Interinstitutional Agreement states that information relating to operations not included in the general budget and the foreseeable development of the various categories of own resources is to be set out in tables, as an indication, and updated annually when the technical adjustment is made to the financial framework.

This information, updated in line with the latest estimates available, is set out in Tables 3.1 to 3.2. It covers the European Development Fund (EDF) and the structure of own resources.

ANNEXES

TABLE 1: FINANCIAL FRAMEWORK 2007-2013

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TABLE 2: FINANCIAL FRAMEWORK (EU-27) ADJUSTED FOR 2012

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TABLE 3: INDICATIVE PROGRAMME OF EXPENDITURE NOT ENTERED IN THE GENERAL BUDGET AND PROSPECTIVE TREND IN THE VARIOUS OWN RESOURCES

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[1] Council Decision 2010/196/EU, Euraton of 16 March 2010 on the allocation of financial intermediation services indirectly measured (FISIM) for the establishment of the Gross National Income (GNI) used for the purposes of the European Union's budget and its own resources, OJ L 87, 7.4.2010, p. 31.

[2] Communication from the Commission to the EP and the Council on the adaptation of the ceiling of own resources and of the ceiling for appropriations for commitments following the decision to apply FISIM for own resources purposes, COM(2010) 162.