EN    EN EN 
EN    EN  EUROPEAN COMMISSION 
Brussels, 11.10.2010 
SEC(2010) 1199 final 
  
AMENDING LETTER N° 2 
TO THE DRAFT GENERAL BUDGET 2011 
STATEMENT OF REVENUE AND EXPENDITURE BY SECTION 
Section III - Commission 
EN 2   EN AMENDING LETTER N° 2 
TO THE DRAFT GENERAL BUDGET 2011 
STATEMENT OF REVENUE AND EXPENDITURE BY SECTION 
Section III - Commission 
 
Having regard to: 
– the Treaty on the Functioning of the Europ ean Union, and in particular Article 314 
thereof, in conjunction with the Treaty establishing the European Atomic Energy 
Community, and in particul ar Article 106a thereof, 
– the Council Regulation (EC, Euratom)  No 1605/2002 of 25 June 2002 on the 
Financial Regulation applicable to the general budget of the European Communities1, 
and in particular Article 37 thereof, 
– the draft general budget of the European Un ion for the financial year 2011 presented 
by the Commission on 15 June 2010, 
– the draft amending letter No. 1/20112, 
The European Commission hereby presents to  the budgetary authority the Amending Letter 
No. 2 to the 2011 draft budget for the reasons set out in the explanatory memorandum. 
                                                 
1 OJ L 248, 16.9.2002, p. 1.  
2 SEC(2010) 1064. 
EN 3   EN CHANGES TO THE STATEMENT OF  REVENUE AND EXPENDITURE BY 
SECTION  
The changes to the statement of revenue a nd expenditure by secti on are available on EUR-
Lex ( http://eur-lex.europa. eu/budget/www/index-en.htm ). An English version of the changes 
to these statements by sec tion is attached for inform ation as a budgetary annex. 
EN 4   EN TABLE OF CONTENTS 
1. Introduction................................................................................................................ .. 5 
2. Europol..................................................................................................................... .... 5 
3. Financial Supervision Authorities................................................................................ 6 4. European Financial Stabilisation Mechanism.............................................................. 6 8. Summary table by heading of the Financial Framework ............................................. 9 
EN 5   EN 1. I NTRODUCTION  
The Amending Letter No 2 (AL 2) to th e Draft Budget for 2011 (DB 2011) covers the 
following: 
– A reinforcement of the EU contributi on to Europol by EUR 552 000, as well as 
modifications to the establishment plan of Eu ropol, reflecting a request for four additional 
establishment plan posts (all AD posts); 
– A reinforcement of the EU contribution to the three Financial Supervision Authorities 
(EBA, EIOPA and ESMA) by EUR 1 224 000, as well as modifications to the establishment 
plans of the Authorities, reflecting a request for six additional establishment plan posts for 
EBA (of which 3 AD posts and 3 AST posts), si x additional establishment plan posts for 
EIOPA (of which 5 AD posts and 1 AST post), and fifteen additional establishment plan 
posts for ESMA (of which 10 AD posts and 5 AST posts); 
– The creation of a new budget item 01 04 01 03 for the guarantee provided by the European 
Union in accordance with the provisions of Article 122(2) of the Treaty on the Functioning of the European Union (TFEU) and, correspond ingly, a new article 802 on the revenue side. 
This has no budgetary implications. 
The net financial impact of this amendi ng letter is EUR 1 776 000, both in commitment 
appropriations and payment appropriations. 
2. E
UROPOL  
The rationale for the changes introduced in th is amending letter derives from new tasks 
assigned to Europol after the appr oval of the 2011 Draft Budget. 
Following the consent by the European Parliame nt and the Council to c onclude the agreement 
between the European Union and the United Stat es of America on the pr ocessing and transfer 
of Financial Messaging Data from  the European Union to the Unite d States for the purposes of 
the Terrorist Finance Tracking Programme (TFT P), as from 1 August 2010 Europol is tasked 
with implementing the EU/US TFTP agreement. This includes the verification of TFTP 
requests in line with the aforementioned agreement. 
This new task assigned to Europol requires addi tional allocation of res ources in 2011, to ensure 
secure means of transmission of information fr om the US to Europol by acquiring dedicated 
equipment and software, to set up a new unit comp rising four new posts, on a full year basis, 
i.e. to recruit a Head of Un it supported by two senior specialis ts in terrorism matters and 
financial intelligence proce ssing and one legal expert.  
The financial consequences amount to EUR 552 000, of which EUR 400 000 for staff 
expenditure (Title 1) and EUR 152 000 for operational expenditure (Title 3). 
The full establishment plan is included in the budgetary annex.  
EN 6   EN 3. F INANCIAL SUPERVISION AUTHORITIES  
The rationale for the changes introduced in th is amending letter is the proposal from the 
Commission to entrust the European Securitie s and Markets Authority (ESMA) with new 
responsibilities for the authoris ation and supervision of credit rating agencies, as well as the 
Legislator's decision to assign ESMA, the European Banking Authority (EBA) and the 
European Insurance and Occupational Pensions  Authority (EIOPA) additional tasks, which 
were not foreseen in the init ial proposals of the Commission. 
3.1. Proposal for an amending Regulation on credit rating agencies - ESMA  
On 2 June 2010, the Commission proposed to amend Regulation (EC) No 1060/2009 on credit 
rating agencies3, aiming to entrust the European Secu rities and Markets Authority (ESMA) 
with responsibilities for the authorisation a nd supervision of credit rating agencies (CRAs), 
including investigation pow ers, on site inspections and supervisory decisions. 
Art. 19 of the proposal provides that ESMA's expenditure necessary for the registration and 
supervision of CRAs according to the Regulation sh all be fully covered by fees charged to the 
credit rating agencies. The detailed structure and provisions of the fees shall – pursuant to Art. 19 of the proposal - be determined by a Commission delegated act which is expected to be adopted in the course of 2011 and is supposed to enter into force at  the beginning of 2012.  
As the proposal was adopted by the Commission in June this year, th e budgetary request was 
not included in the Draft B udget 2011 issued in May 2010. Th is motivates the proposed 
revision of the establis hment plan and of the EU budget c ontribution as detailed in the 
budgetary annex. 
In the transition year 2011, resources for supe rvision of CRAs should be made available by 
Member States and EU budget contributions acco rding to the ratio fo reseen in the ESMA 
Regulation (40% EU budget and 60% Member Stat es contribution). Acco rding to the proposal, 
no contribution to cover the cost of supervisi on of CRAs will be necessary from 2012 onwards. 
The resources implications in 2011 are indicate d in the financial statement accompanying the 
legislative proposal. In terms of human resource s, six additional establishment plan posts are 
requested, on a full year basis Overall, the financial consequences amount to EUR 2,5 million, of which EUR 2,2 million for staff and infrastructu re expenditure (Titles 1 and 2) and EUR 0,3 
million for operational expenditure (Title 3). In  order to finance the corresponding EU share 
(40%), the additional contri bution to be covered by the EU budget in 2011 amounts to 
EUR 1 million.  
3.2. Additional tasks assigned  to ESMA, EBA and EIOPA  
The European Parliament and the Council have r eached a political agreement on the creation of 
the three Authorities at the be ginning of September 2010. The final text of the regulations is 
presently being finalised; the European Parl iament has adopted the package on 22 September 
and the adoption by the Council is expected at the ECOF IN meeting of October. 
It is therefore appropriate that the budgetary impact in 20 11 of new tasks assigned by the 
Legislator to the Authorities is properly assessed and incl uded in this amending letter. 
                                                
 
3 COM (2010) 289 final 
EN 7   EN The additional tasks assigned to all th ree Authorities include, inter alia: 
– a leading role in promoting transparency, simplicity and fairness in the market for consumer 
financial products or services (Article 6); 
– monitoring the efficient, effective and consiste nt functioning of the colleges of supervisors 
(Article 12); 
– monitoring and assessment of systemic risk, de veloping criteria for the identification and 
measurement of systemic ri sk (Articles 12a to 12c); 
– ensuring specialised an d ongoing capacity to respond effectiv ely to the materialisation of 
systemic risks (Article 12c); 
– contributing and participating actively in the development and coordination of effective and 
consistent recovery and resolution plans, pro cedures in emergency si tuations and preventive 
measures to minimise the systemic impact of a ny failure in the areas of  competence (Article 
12c). 
Concerning the staff requirements in view of the additional task s assigned to the Authorities, 
the Commission services estimate that nine additional posts are necessary for ESMA as well as six posts for EBA and six posts for EIOPA in 2011. The corresponding salary  needs of half of 
these additional posts have been calculated on a nine month basis, and the other half on a six 
month basis, in order to take into account the estimated recr uitment time required. The full 
establishment plans for ESMA, EBA and EIOP A are included in the budgetary annex. 
A thorough review of the financial needs and st aff requirements of the agencies has been 
carried out by the Commission's services, covering all activities of the agencies. This review 
has also allowed the Commission to  establish a more precise esti mate of some budgetary items 
of the agencies' budgets. In part icular, infrastructure costs of  the ESMA have been revised 
upwards to deal with the planned increased st aff number of the Authority, whereas certain 
average costs for staff appeared to have initia lly been overestimated, and have been revised 
downwards accordingly.  
This detailed review of agency expenditure la rgely offsets the additiona l costs resulting from 
the additional tasks granted by the legislative authority. Overall, a combined net increase of EUR 560 000 of the budget of the Au thorities is considered necessa ry to support the creation of 
the new agencies with reference to additional tasks assigned by the Legislator, of which EUR 
300 000 for ESMA, EUR 140 000 for EBA and EUR 120 000 for EIOPA. This amount of 
EUR 560 000 is the net result of an overall increase of EUR 1 677 000 for staff and 
infrastructure expenditure (Titles 1 and 2) , and an overall decrease of EUR 1 117 000 for 
operational expenditure (Title 3) . It is therefore proposed to increase the EU contribution by 
EUR 224 000 in 2011, taking into account that 60%  of the required reinforcement will be 
covered by Member States' contributions. 
EN 8   EN 4. E UROPEAN FINANCIAL STABILISATION MECHANISM  
On 9th May 2010, the Council decided on a comprehensive package of measures to preserve 
financial stability in Europe , including a European Financ ial Stabilisation mechanism4 based 
on Article 122(2) of the TFEU. This Article fore sees financial support for Member States in 
difficulties caused by exceptional circumstances beyond Member States’ control. 
The mechanism will operate without prejudice to the existing facility providing medium term 
financial assistance for non euro area Member States’ balance of payments. 
To grant this financial assistance the Commission will borrow on the capital markets or with 
financial institutions on behalf of the European  Union. In order to honour its obligations should 
the debtors default, the Commission may draw  on its cash resources to service the debt 
provisionally. Article 12 of Council Regulat ion (EC, Euratom) No 1150/2000 of 22 May 2000 
implementing Decision 2000/597/EC, Euratom on the system of the Communities’ own 
resources shall apply. Subsequently, it ma y be necessary to budget the operation. 
Reimbursements after an initial default or any ot her revenue arising from the exercise of rights 
in connection with the guarantee may al so need to be budgeted as revenue. 
It is therefore proposed to create a new budget item on the expenditure side and a 
corresponding new budget article on the revenue si de as the budget struct ure for the guarantee 
provided by the European Union. This has already been done fo r the 2010 budget, by means of 
Amending Budget 5/20105. 
As it is of use for budgetary items linked to lending operations withou t a specific guarantee 
fund, the new item 01 04 01 03 and new article 8 0 2 will receive a token entry (p.m.). If 
necessary, the Commission will propose to make available the appropriations needed by means 
of a transfer or an amending budget. 
                                                 
4 Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation 
mechanism. 
5 Former Draft Amending Budget No 7/2010, COM (2010) 383. 
 
EN 9   EN 5. S UMMARY TABLE BY HEADING OF THE FINANCIAL FRAMEWORK  
2011 Financial framework 2011 Draft Budget + AL 1/2011 AL 2/2011 2011 Draft Budget + AL 1-2/2011 Financial framework 
Heading/subheading CA PA CA PA CA PA CA PA 
1. SUSTAINABLE GROWTH        
1a. Competitiveness for growth and 
employment 12 987 000 000 13 436 852 270 12 109 714 170 1 224 000 1 224 000 13 438 076 270 12 110 938 170 
1b. Cohesion for growth and employment 50 987 000 000 50 970 093 784 42 540 796 740 50 970 093 784 42 540 796 740 
Total 63 974 000 000 64 406 946 054 54 650 510 910 1 224 000 1 224 000 64 408 170 054 54 651 734 910 
Margin6 67 053 946    65 829 946  
2. PRESERVATION AND 
MANAGEMENT OF NATURAL RESOURCES        
Of which market related expenditure and 
direct payments 47 617 000 000 43 747 401 900 43 656 761 358 43 747 401 900 43 656 761 358 
Total 60 338 000 000 59 486 248 389 58 135 685 296 59 486 248 389 58 135 685 296 
Margin 851 751 611    851 751 611  
3. CITIZENSHIP, FREEDOM, 
SECURITY AND JUSTICE   
3a. Freedom, Security and Justice 1 206 000 000 1 135 252 740 852 573 740 552 000 552 000 1 135 804 740 853 125 740 
3b. Citizenship 683 000 000 667 817 000 638 979 000 667 817 000 638 979 000 
Total 1 889 000 000 1 803 069 740 1 491 552 740 552 000 552 000 1 803 621 740 1 492 104 740 
Margin  85 930 260    85 378 260  
4. EU AS A GLOBAL PLAYER7 8 430 000 000 8 613 529 377 7 601 763 867 8 613 529 377 7 601 763 867 
Margin 70 330 623 70 330 623  
5. ADMINISTRATION8 8 334 000 000 8 289 835 688 8 290 890 688 8 289 835 688 8 290 890 688 
Margin 126 164 312  126 164 312  
TOTAL 142 965 000 000 134 280 000 000 142 599 629 248 130 170 403 501 1 776 000 1 776 000 142 601 405 248 130 172 179 501 
 Margin   1 201 230 752 4 394 596 499  1 199 454 752 4 392 820 499 
 
 
                                                 
6 The European Globalisation adjustment Fund (EGF) is not included in the calculation of the margin under Heading 1a (EUR 500 mi llion).  
7 The 2011 margin for heading 4 does not take into account the appr opriations related to the Emergency Aid Reserve (EUR 253,9 mi llion).  
8 For calculating the margin under the ceiling for heading 5, account is taken of the footnote (1) of the financial framework 20 07-2013 for an amount of EUR 82 million for the 
staff contributions to the pension scheme.