Communication from the Commission to the Council - Goods not covered by Annex I to the Treaty Temporary flat-rate reduction of refunds
Date: 1999-12-10
Institutions: European Commission
Subjects: EAGGF Guarantee Section, agricultural product, export refund

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 10.12.1999
COM(1999) 673 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

Goods not covered by Annex I to the Treaty

Temporary flat-rate reduction of refunds

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

Goods not covered by Annex I to the Treaty -

Temporary flat-rate reduction of refunds

The purpose of this communication is to inform the Council that, despite the three
unfavourable opinions delivered by the joint management Committee on milk and milk
products, cereals and sugar on 25 November 1999 (milk products: 5 votes in favour, 15
abstentions, 67 votes against; cereals: 72 votes against, 15 abstentions; sugar: 20
abstentions, 67 votes against), the Commission has decided to adopt, by means of
regulations (EC) No 2533/1999, No 2534/1999, No 2535/1999, a temporary flat-rate
reduction of 4.5% in the rate of refunds for agricultural products exported in the form
of goods not covered by Annex I.

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

The European Council in Berlin decided to place a ceiling, as from the budget year
2000, on spending under the EAGGF guarantee section, at a level well below the
agricultural guideline.

Thus, for the budget year 2000 the ceiling for overall spending under the EAGGF
guarantee section is
37 352 million for conventional
EAGGF guarantee section spending), which is well below the guideline for the year in
€
question (

46 549 million: see Annex 1).

41 738 million (of which

€

€

Consequently, in its letter of amendment to the preliminary draft budget for the year
2000 the Commission puts appropriation requirements for export refunds for goods
not covered by Annex I to the Treaty at

560 million.

€

578 million (due to the general increase
Current forecasts for the year 2000 are about
in refund levels compared with 1999). In addition, this figure does not take account of
a possible upturn in the Russian market and/or the Asian market.

€

€

A saving of

18 million must therefore be made for the budget year 2000.

In its Communication to the Council adopted on 24 November, the Commission
indicated the problem which will be caused in the medium and long term by placing a
ceiling on expenditure on non-Annex I refunds, and proposed a global approach
involving the introduction of several economy measures.

In any event, it will be impossible to implement these measures until the second half
of the budget year at the earliest.

In addition, the Commission estimates the time lag between export and the payment of
non-Annex I refunds to be three months. Accordingly, a reduced rate applied on the
day of export will have only a delayed effect on the budget (even more delayed where
refund rates are fixed in advance).

18 million over the period 16 October 1999 to
To make an immediate saving of
15 October 2000, the Commission, aware that reduced refund rates would not affect
the budget until 1 February 2000, has taken the initiative of proposing a general and

€

2

temporary flat-rate reduction of 4.5%. This reduction has been in application since
1 November 1999, following the joint Committee’s failure to deliver an opinion on
28 October 1999.

(10)

Since then, two new factors have complicated the situation: firstly, the budget for non-
Annex I refunds has been reduced to
557 million; secondly, prices have continued to
fall on the world markets, notably for sugar and cereals, forcing the Commission to
maintain and increase refund rates beyond what was forecast.

€

(11) Article 4(1) of Commission Regulation (EC) No 1222/94 stipulates that “The rate of
refund shall be fixed for each month...”. The opinions of the relevant management
Committees ought therefore to be sought each month regarding the fixing of rates.
Given the circumstances, the Commission proposed maintaining the temporary flat-
rate reduction of 4.5% for the three types of product (milk products, cereals, sugar).
This proposal was put to the joint management Committee for milk products, cereals
and sugar on 25 November 1999 for an opinion, and received an unfavourable opinion
(see above).

(12)

In view of the circumstances, the Commission has decided to adopt and apply the
regulations (EC) No 2533/1999, No 2534/1999, No 2535/1999 as from 1 December
1999. This decision must be communicated to the Council
in accordance with
Article 23(3) of Council Regulation (EC) No 1766/92 on the common organisation of
the market in cereals and the corresponding Articles of Council Regulation (EEC)
No 804/68 (milk and milk products) and Council Regulation (EC) No 2038/1999
(sugar).

3

ANNEX 1
Budget year 2000: Appropriation requirements from the EAGGF Guarantee Section

Chapter

Sector

Budget
appropriations
1999 (1) (2)

Appropriation
requirements based
on PDB 2000

Appropriations
PDB 2000 (2)

Requirements
based on LA in
PDB 2000

Appropriation to
be entered in LA in
PDB 2000 (2)

Variation in LA
requirements
compared with
PDB requirements

a
B1 - 10
B1 - 11
B1 - 12
B1 - 13
B1 - 14
B1 - 15
B1 - 16
B1 - 17
B1 - 18
B1 - 20
B1 - 21
B1 - 22
B1 - 23
B1 - 25
B1 - 26
B1 - 30
B1 - 31
B1 - 32
B1 - 33
B1 - 36
B1 - 37
B1 - 38
B1 - 39

B1 - 40

b

Arable crops
Sugar
Olive oil
Died fodder and grain legumes
Fibre plants
Fruit and vegetables
Wine
Tobacco
Other sectors or vegetable products
Milk and milk products
Beef/veal
Sheepmeat and goatmeat
Pigmeat, eggs and poultrymeat
Other animal product measures
Fisheries
Non-annex I products
Food programmes
POSEI
Veterinary and plant health measures
Monitoring and preventative measures
Clearance of previous years' accounts
Promotion
Other measures
Total titles 1.2 and 3
"Berlin" subceiling
Margin
Rural development
"Berlin" subceiling
Margin
Total EAGGF Guarantee
Guideline
Margin compared with guideline

c

17 831
1 937
2 233
388
968
1 701
661
980
290
2 621
4 916
1 755
365
29
20
610
368
246

56
-510
92
266
37 823
-
-
2 617
-
-
40 440
45 188
4 748

d
16 815
1 873
2 387
385
934
1 680
718
978
307
2 686
4 733
2 050
236
10
20
560
316
245
105.5
59
-400
70.5
796
37 564
37 352
-212
3 587
4 386
799
41 151
46 549
5 398 (3)

e
16 704
1 861
2 371
382
928
1 669
713
972
305
2 668
4 702
2 037
234
10
20
556
314
243
104.5
59
-400
70.5
791
37 314
37 352
38
3 587
4 386
799
40 901
46 549
5 648 (3)

f
16 930
2 031
2 228
387
1 041
1 682
708
992
316
2 788
4 542
1 864
472
10
14
560
340
245
109.5
59
-700
69.5
849
37 537
37 352
-185
3 787
4 386
599
41 324
46 549
5 225 (3)

h = f – d
115
158
-159
2
107
2
-10
14
9
102
-191
-186
236
0
-6
0
24
0
4
0
-300
-1
53
-27

200

173

g
16 842
2 020
2 216
385
1 036
1 673
704
987
314
2 773
4 518
1 854
470
10
14
557
338
244
108.5
59
-700
69.5
845
37 337
37 352
15
3 787
4 386
599
41 124
46 549
5 425 (3)

(1)
(2)
(3)

Expenditure or appropriations covered by EAGGF Guarantee in 1999 but subdivided according to the nomenclature proposed for 2000.
Including appropriations entered in B0 - 40 (reserve and provision).
SAPARD expenditure is also to be financed within the guideline (EUR 529 million).

Million Euro

Variation in LA
appropriations
compared with
PDB
appropriations
i = g - e

138
159
-155
3
108
4
-9
15
9
105
-184
-183
236
0
-6
1
24
1
4
0
-300
-1
54
23

200

223

4

1.

2.

3.

4.

5.

5.0

5.1

FINANCIAL STATEMENT

BUDGET HEADING:
B I-30
TITLE:
Measures to reduce refund rates for goods not covered by Annex I
LEGAL BASIS:
Articles 36 and 37 of the Treaty
AIMS OF PROJECT/
Budget saving of
FINANCIAL IMPLICATIONS

18 million

€

PERIOD OF 12
MONTHS

(EUR million)

DATE: 25/11/99
APPROPRIATIONS:

CURRENT
FINANCIAL
YEAR (98)
(EUR million)

FOLLOWING
FINANCIAL
YEAR (99)
(EUR million)

CHARGED TO THE EC BUDGET

NATIONAL ADMINISTRATION
OTHER

EXPENDITURE
-
(REFUNDS/INTERVENTION)
-
-
REVENUE
-
(LEVIES/CUSTOMS DUTIES)
NATIONAL
-

OWN RESOURCES OF THE EC

5.0.1 ESTIMATED EXPENDITURE
5.1.1 ESTIMATED REVENUE (see observations)
5.2 METHOD OF CALCULATION:

2000

2001

2002

2003

6.0

6.1

CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT
CHAPTER OF THE CURRENT BUDGET?
CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT
BUDGET?
IS A SUPPLEMENTARY BUDGET NECESSARY?

6.2
6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY?
OBSERVATIONS:

NO

NO
NO
NO

5