COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Technical adjustment of the financial perspective for 2002 in line with movements in GNP and prices (Paragraph 15 of the Interinstitutional Agreement of 6 May 1999 on budgetary discipline and improvement of the budgetary procedure)

1. The financial perspective table for 2000-06 forms an integral part of the Interinstitutional Agreement of 6 May 1999 on budgetary discipline and improvement of the budgetary procedure [1].

[1] OJ C 172, 18 June 1999, p. 1.

Paragraph 15 of the Interinstitutional Agreement states that each year the Commission will, ahead of the budgetary procedure for year n+1, make a technical adjustment to the financial perspective in line with movements in the EU's gross national product (GNP) and prices.

The purpose of this communication is to present to the budgetary authority the result of this technical adjustment for 2002.

2. Table 1 shows the adjusted financial perspective at 2002 prices.

The overall ceiling on appropriations for commitments for 2002 comes to EUR99 802 million, equivalent to 1.09% of GNP.

The corresponding ceiling on the appropriations for payments for EU 15 comes to EUR100 078 million, i.e. around 1.10% of GNP.

Allowing for the amount left available for accession, the overall ceiling on appropriations for payments is EUR104 475 million (around 1.14% of GNP for EU 15), which, on the basis of current economic forecasts, leaves a margin beneath the own resources ceiling of EUR11 442 million.

For 2000 and 2001, the size of the margin has been updated from the previous technical adjustments using the most recent GNP estimates so that comparisons can be made over a number of years. On the other hand, the ceilings in commitments and payments resulting from the adjustments made do not change.

Table 2 sets out, for reference, the adjusted financial framework for EU-21 at 2002 prices. The GNP figure used in the table is that of the Union enlarged to include six new Member States (Poland, Czech Republic, Hungary, Estonia, Slovenia, Cyprus).

As an estimate of GNP is not available for each of these countries, the GDP aggregate has been used for them here on the basis of the most recent figures and forecasts. The total GDP for these countries is put at EUR379 billion in 2002.

3. Table 3 presents the macroeconomic parameters used for this adjustment exercise. They are based on data drawn up by Eurostat and on the most recent forecasts made by the Commission in conjunction with the national experts (budget forecasts, autumn 2000)

These figures and forecasts are based on the European System of Accounts set up in 1979 (ESA 79).

Article 8 of the regulation [2] setting up the new ESA 95 system stipulates that the old ESA 79 system will continue to apply for budgetary and own resources purposes for as long as the then existing Own Resources Decision remains in force. A new Own Resources Decision [3] was approved by the Council on 29 September 2000. It will enter into force once it has been adopted by all the Member States in accordance with their respective constitutional rules. At that point the new accounting system will apply for budgetary purposes. In particular, in accordance with Article 3 of the Decision, the own resources ceiling set at 1.27% of GNP will be recalculated so that the introduction of the new accounting system does not affect the absolute amount of own resources available. This new percentage will, when the time comes, be incorporated into the financial perspective table for 2002 and subsequent years.

[2] Council Regulation (EC) 2223/96 of 25 June 1996, OJ L 310, 30 November 1996, p.1.

[3] Council Decision 2000/597/EC, Euratom of 29 September 2000, OJ L 253, 7 October 2000, p.42.

4. The adjustment is calculated by applying the following deflators to the financial perspective (at 1999 prices):

-A cumulative deflator of 6.12% for the period 2000-2002 to the ceiling for heading 1 and to the figure for the Structural Funds in heading 2, in accordance with paragraph 15 of the Interinstitutional Agreement.

-The cumulative GNP deflator in euros for 2000-2002 (6.64%) to the other ceilings, apart from subheading 6 (Monetary reserve), which is expressed in current prices.

As regards payments, the adjustment is based on the appropriations for payments estimated for each heading when the financial perspective was drawn up (1999 prices). The method of calculation is set out in the following table:

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As regards the appropriations for payments available for accession, those coming under heading 1 have been adjusted by means of a 6.12% cumulative deflator. For "other expenditure", a distinction is made between payments for structural operations, to which the cumulative 6.12% deflator is applied, and payments under headings 3 and 5, for which the cumulative 6.64% deflator has been used.

The indicative table for the financial framework for EU-21 (see Table 2) has been adjusted in the same way. In heading 8 (Enlargement), the commitment appropriations for agriculture and structural operations have been adjusted by means of the cumulative 6.12% deflator and those for internal policies and administration by means of the cumulative 6.64% deflator. Payments under heading 8 have been adjusted using the same method of calculation as for the payments available for accession in the financial perspective.

5. The agricultural guideline has been calculated in accordance with Article 3 of the new Council Regulation on budgetary discipline [4] (see Table 4).

[4] Council Regulation (EC) No 2040/2000 of 26 September 2000, OJ L 224, 29 September 2000, p.27.

The figures for sugar and isoglucose levies, food aid refunds and ACP sugar refunds are based at this stage on the amounts entered in the 2001 budget. In accordance with the Decision on budgetary discipline, the final level of these specific items in the guideline will be fixed when the preliminary draft 2002 budget is presented.

In 2002 the agricultural guideline is provisionally EUR51 078 million [5].

[5] A margin of EUR2 238 million in relation to all the expenditure which, in accordance with the Regulation on budgetary discipline, is included under the guideline (heading 1, the "agriculture" section of the pre-accession aid under heading 7, the amounts left available for accession in respect of agriculture).

6. In the case of heading 5, a footnote to the financial perspective 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 EUR1 100 million (1999 prices) for the period 2000-2006. As stated in the Commission communication on the technical adjustment for 2000 [6], this provision should be interpreted as imposing a dual limit on the amounts deducted from expenditure on pensions when applying the ceiling for the heading:

[6] SEC(1999) 847 final, paragraph 6.

-this amount may not exceed the contributions actually entered as budget revenue in any one year. For 2002 these contributions are provisionally estimated [7] at EUR179 million, i.e. EUR168 million at 1999 prices with the cumulative deflator of 6.64% applied for the adjustment to the ceiling for the heading;

[7] The rate of increase envisaged for 2002 for expenditure on remunerations has been applied to the amount of contributions entered in the 2001 budget (EUR170.7 million).

-the accumulated total of deductions for the period 2000-2006 may not exceed EUR1 100 million at 1999 prices, equivalent to an average of EUR157 million a year (EUR167 million at 2002 prices).

As administrative expenditure is, as a rule, recurrent, the lowest limit - i.e. a maximum of EUR167 million at current prices for 2002 - should be adopted each year to avoid using a margin at the start of the period which will no longer be fully available afterwards.

7. The fifth subparagraph of paragraph 10 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 perspective.

This information, updated in line with the latest estimates available, is set out in Tables 5.1 to 5.3. It covers the EDF, the ECSC operating budget and the structure of own resources.

8. The Commission will present to the budgetary authority its proposal for adjustments to the financial perspective in connection with implementation under paragraphs 16 to 18 of the Interinstitutional Agreement once the outturn figures for 2000 are available (mid-February 2001).

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