Communication from the Commission to the Council and the European Parliament - Technical adjustment of the financial perspective for 2001 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)
Date: 2000-02-17
Institutions: European Commission
Subjects: agricultural expenditure, budgetary discipline (EU), gross national product, interinstitutional agreement, own resources

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 17.02.2000
COM(2000)93 final

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

Technical adjustment of the financial perspective for 2001
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)

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

Technical adjustment of the financial perspective for 2001
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.

the Interinstitutional Agreement

the
Paragraph 15 of
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.

states that each year

The purpose of this communication is to present to the budgetary authority the result
of this technical adjustment for 2001.

2.

Table 1 shows the adjusted financial perspective at 2001 prices.

The overall ceiling on appropriations for commitments for 2001 comes to
million, equivalent to 1.19% of GNP.

€

97 189

The corresponding ceiling on the appropriations for payments required comes to
€

94 730 million, i.e. around 1.11% of GNP.

€

13 643 million between the ceiling on appropriations for
This leaves a margin of
payments and the own-resources ceiling, i.e. 0.16% of GNP, on the basis of current
economic forecasts. The margin for 2000 has been updated in relation to the
technical adjustment for 20001 by including the latest GNP estimates for 2000 and
thus allowing comparisons to be made between a number of years. However, the
ceilings on commitments and payments resulting from that adjustment have not been
changed.

Table 2 sets out the adjusted financial framework for EU-21 at 2001 prices by way of
indication. The GNP figure incorporates the latest estimates available for the GNP of
the six countries in the first wave of accession (Poland, Czech Republic, Hungary,
Estonia, Slovenia, Cyprus). The total GNP of these countries for 2001 is estimated at
€
315 billion.

3.

Table 3 contains the macroeconomic data and forecasts used by the Commission to
make the technical adjustment for 2001. The latest estimates presented by the
Commission (budget forecasts, November 1999) have been used for the period 1999-
2000. Both the retrospective data for 1988-1998 (drawn up by Eurostat and used here
to calculate the agricultural guideline) and the provisional forecasts for 1999-2001

1

SEC(1999) 847 final, tables 1 and 2.

2

are based on the European System of Accounts set up in 1979 (ESA 79). Under the
proposal for a new own resources decision,2 the new ESA 95 will not be used for
budgetary purposes until 2002.

4.

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

– A cumulative deflator of 4.04% for the period 1999-2001 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 GNP deflator in euros for 1999-2001 (3.84%) 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:

Approps for
payments 2001 at
1999 prices
(
million)

€

Cumulative
deflator
2000-2001
(%)

Approps for
payments
2001 at 2001
prices
million)

€

(

Appropriations
(heading 1)

for payments

42.800

Appropriations
(heading 2 - Structural Funds)

for payments

27.430

Appropriations
(heading 5)

for payments

4.600

Approps for
payments
(heading 6)

Monetary
reserve

Other reserves

appropriations
(heading

for
Other
payments
-
Cohesion Fund - + headings 3
+ 4 + 7)

2

500

400

15.380

4.04

4.04

3.84

0

3.84

3.84

44.529

28.538

4.777

500

415

15.971

Total appropriations for payments

94.730

In heading 1, the appropriations for payments available for accession have been
adjusted by means of a 4.04% cumulative deflator. For "other expenditure", a
distinction is made between payments for structural operations,
to which the
cumulative 4.04% deflator is applied, and payments under headings 3 and 5, for
which the cumulative 3.84% deflator has been used.

2

COM(1999) 333 final

3

The indicative table for the financial framework for EU-21 has been adjusted in the
same way (see Table 2). In heading 8 (Enlargement), the commitment appropriations
for agriculture and structural operations have been adjusted by means of the
cumulative 4.04% deflator and those for internal policies and administration by
means of the cumulative 3.84% 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.

The agricultural guideline, which is no longer the ceiling for heading 1, is calculated
in accordance with the latest Council Decision on budgetary discipline3 (see table 4).
The parameters applied - both for real growth and the deflator - relate to the twelve-
nation Community for the period 1988-95 and the fifteen-nation Community from
1996 onwards.

The figures for sugar and isoglucose levies, food aid refunds and ACP sugar refunds
are based at this stage on the most recent estimates. 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 budget is presented.

In 2001 the agricultural guideline comes to

€

48 841 million.4

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
1 100 million (1999
staff contributions to the pension scheme, up to a maximum of
prices) for the period 2000-06. As stated in the Commission communication on the
technical adjustment for 2000,5 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:

€

- this amount may not exceed the contributions actually entered as budget revenue in
any one year. For 2001 these contributions are provisionally estimated6 at
169.3
million, i.e. 163 million at 1999 prices with the cumulative deflator of 3.84% applied
for the adjustment to the ceiling for the heading;

€

- the accumulated total of deductions for the period 2000-06 may not exceed
million at 1999 prices, equivalent to an average of
at 2001 prices).

157 million a year (

€

€

1 100
163 million

€

€

limit - i.e. a
As administrative expenditure is, as a rule, recurrent, the lowest
163 million at current prices for 2001 - should be adopted each year to
maximum of
avoid using a margin at the start of the period which will no longer be fully available
afterwards.

OJ L 293, 12.11.1994. An adjustment to the method for calculating the agricultural guideline is now
being discussed, but has yet to be adopted. It cannot therefore be used in this case.
A margin of 3 771 millions in relation to all the expenditure which will now be included under the
guideline as a result of the conclusions of the Berlin European Council (heading 1 and the agricultural
section of the pre-accession aid under heading 7).
SEC(1999) 847 final, paragraph 6.
As with remunerations, a rate of
€
(
for 2001.

increase of 3% has been applied to the figure for 2000
164.4 million). The figure proposed by the Commission will appear in the preliminary draft budget

4

5.

6.

3

4

5

6

7.

The fifth subparagraph of paragraph 10 of the Interinstitutional Agreement states that
included in the general budget and the
information relating to operations not
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.

5

Table 1 : FINANCIAL PERSPECTIVE ADJUSTED TO 2001 PRICES

Current prices

2000
41.738
37.352
4.386
32.678
30.019
2.659
6.031
4.627
4.638
906
500
203
203
3.174
529
1.058
1.587
93.792
91.322
1,12%

2001
44.530
40.035
4.495
32.720
30.005
2.715
6.272
4.735
4.776
916
500
208
208
3.240
540
1.080
1.620
97.189
94.730
1,11%

APPROPRIATIONS FOR COMMITMENTS
1. AGRICULTURE
CAP (not including rural development)
Rural development and accompanying measures
2. STRUCTURAL OPERATIONS
Structural Funds
Cohesion Fund
3. INTERNAL POLICIES (1)
4. EXTERNAL ACTION (not including Phare from 1999 onwards)
5. ADMINISTRATION (2)
6. RESERVES
Monetary reserve
Emergency aid reserve
Guarantee reserve
7. PRE-ACCESSION AID
Agriculture
Pre-accession structural instrument
PHARE (applicant countries)
TOTAL APPROPRIATIONS FOR COMMITMENTS
TOTAL APPROPRIATIONS FOR PAYMENTS
Appropriations for payments as % of GNP
AVAILABLE FOR ACCESSION (appropriations for payments)
Agriculture
Other expenditure
CEILING, APPROPRIATIONS FOR PAYMENTS
Ceiling, payments as % of GNP
Margin for unforeseen expenditure
Own resources ceiling
(1) In accordance with Article 2 of Decision No182/1999/EC of the European Parliament and of the Council and Article 2 of Council Decision1999/64/Euratom (OJ L 26, 1.2.1999, p. 1
and p. 34),
(2) The expenditure on pensions included under the ceiling for this heading is calculated net of staff contributions to the pension scheme, up to a maximum of
prices for the period 2000-06.

2006
43.344
38.797
4.547
30.343
27.737
2.606
6.853
4.787
5.296
416
0
208
208
3.240
540
1.080
1.620
94.279
93.197
0,97%
14.792
3.537
11.255
107.989
1,12%
0,15%
1,27%

2005
43.624
39.088
4.536
30.785
28.174
2.611
6.729
4.776
5.192
416
0
208
208
3.240
540
1.080
1.620
94.762
93.759
1,00%
11.899
3.048
8.851
105.658
1,12%
0,15%
1,27%

2003
45.538
41.023
4.515
31.503
28.788
2.715
6.500
4.756
4.984
416
0
208
208
3.240
540
1.080
1.620
96.937
98.671
1,10%
6.979
2.112
4.867
105.650
1,18%
0,09%
1,27%

2002
45.674
41.169
4.505
32.106
29.391
2.715
6.386
4.745
4.880
666
250
208
208
3.240
540
1.080
1.620
97.697
97.975
1,12%
4.306
1.665
2.641
102.281
1,17%
0,10%
1,27%

2001 prices
2004
44.488
39.962
4.526
30.785
28.174
2.611
6.614
4.766
5.088
416
0
208
208
3.240
540
1.080
1.620
95.397
95.581
1,04%
9.247
2.549
6.698
104.828
1,14%
0,13%
1,27%

11 510 million at current prices is available for research over the period 2000-02.

91.322
1,12%
0,15%
1,27%

94.730
1,11%
0,16%
1,27%

1 100 million at 1999

€

€

6

Table 2 : FINANCIAL FRAMEWORK EU-21 ADJUSTED TO 2001 PRICES

2003
45.538
41.023
4.515
31.503
28.788
2.715
6.500
4.756
4.984
416

2004
44.488
39.962
4.526
30.785
28.174
2.611
6.614
4.766
5.088
416

2005
43.624
39.088
4.536
30.785
28.174
2.611
6.729
4.776
5.192
416

2006
43.344
38.797
4.547
30.343
27.737
2.606
6.853
4.787
5.296
416

2000
41.738
37.352
4.386
32.678
30.019
2.659
6.031
4.627
4.638
906
500
203
203
3.174
529
1.058
1.587

2001
44.530
40.035
4.495
32.720
30.005
2.715
6.272
4.735
4.776
916
500
208
208
3.240
540
1.080
1.620

EUR million - Appropriations for commitments
1. AGRICULTURE
CAP (not including rural development)
Rural development and accompanying measures
2. STRUCTURAL OPERATIONS
Structural Funds
Cohesion Fund
3. INTERNAL POLICIES (1)
4. EXTERNAL ACTION (not including Phare from 1999 onwards)
5. ADMINISTRATION (2)
6. RESERVES
Monetary reserve
Emergency aid reserve
Guarantee reserve
7. PRE-ACCESSION AID
Agriculture
Pre-accession structural instrument
PHARE (applicant countries)
8. ENLARGEMENT
Agriculture
Structural operations
Internal policies
Administration
TOTAL APPROPRIATIONS FOR COMMITMENTS
TOTAL APPROPRIATIONS FOR PAYMENTS
of which: enlargement
Appropriations for payments as % of GNP
Margin for unforeseen expenditure
Own resources ceiling
(1) In accordance with Article 2 of Decision No182/1999/EC of the European Parliament and of the Council and Article 2 of Council Decision 1999/64/Euratom (OJ L 26, 1.2.1999, p. 1
and p. 34),
(2) The expenditure on pensions included under the ceiling for this heading is calculated net of staff contributions to the pension scheme, up to a maximum of
prices for the period 2000-06.

2002
45.674
41.169
4.505
32.106
29.391
2.715
6.386
4.745
4.880
666
250
208
208
3.240
540
1.080
1.620
6.709
1.665
3.902
758
384
104.406
102.281
4.306
1,13%
0,14%
1,27%

208
208
3.240
540
1.080
1.620
17.455
3.537
12.568
883
467
111.734
107.989
14.792
1,07%
0,20%
1,27%

208
208
3.240
540
1.080
1.620
14.770
3.048
10.404
851
467
109.532
105.658
11.899
1,08%
0,19%
1,27%

208
208
3.240
540
1.080
1.620
9.393
2.112
6.066
789
426
106.330
105.650
6.979
1,13%
0,14%
1,27%

208
208
3.240
540
1.080
1.620
12.076
2.549
8.240
820
467
107.473
104.828
9.247
1,10%
0,17%
1,27%

11 510 million at current prices is available for research over the period 2000-02.

1,11%
0,16%
1,27%

1,12%
0,15%
1,27%

1 100 million at 1999

97.189
94.730

93.792
91.322

€

€

7

Table 3: GNP - FIGURES AND FORECASTS

Real growth rate (%)

-Adjustment for 1999 (memorandum item)

-Adjustment for 2000

-Adjustment for 2001

GNP deflator in euros (%)

-Adjustment for 1999 (memorandum item)

-Adjustment for 2000

-Adjustment for 2001

GNP at current prices (ECU/EUR billion)

-Adjustment for 1999 (memorandum item)

-Adjustment for 2000

-Adjustment for 2001

1999

2000

2001

3,1

1,9

1,9

2,1

2,1

2,2

2,7

3,1

1,7

2,0

3

1,8

7804,3

7714,5

7737,4

8058,5

8136,6

8533,3

Comparison between deflator in national currency and deflator in
euros

1999

2000

2001

Deflators in national currency

Deflators in euros

1,4%

2,2%

1,8%

2,0%

1,9%

1,8%

8

Table 4 : CALCULATION OF THE AGRICULTURAL GUIDELINE FOR 2001

2001

2000

BASE EXPENDITURE (1988 budget)

Less:

- sugar and isoglucose levy
- food aid refunds
- ACP sugar refunds
- Subtotal

CORRECTEDEXPENDITURE(1988prices)

ANNUAL GNP GROWTH RATE

27.500

1.540
386
716
2.642
24.858

€

million

27.500

1.540
386
716
2.642
24.858

3,60%
2,80%
1,80%
1,00%
-0,70%
2,70%
2,40%
1,60%
2,80%
2,70%
1,90%
2,70%

28,36%
20,99%

30.905

30.076

5,20%
4,70%
5,30%
3,50%
1,40%
1,80%
1,30%
3,30%
2,70%
1,70%
2,10%
1,70%

40,63%

44.459

42.294

7,35%
5,44%

46.914

44.594

1.114
46
767
1.927

46.521

1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001

Cumulativegrowthrate
74%ofcumulativegrowthrate
CORRECTEDEXPENDITURE(1988prices)

GNP DEFLATOR

1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001

Cumulativegrowthrate
CORRECTEDEXPENDITURE(2001prices)

IMPACT OF ENLARGEMENT

GNP growth rate in 1995
74% of growth rate
CORRECTEDEXPENDITURE

Plus
Estimatedneedsfor

- sugar and isoglucose levy
- food aid refunds
- ACP sugar refunds
- Subtotal

AGRICULTURAL GUIDELINE

3,60%
2,80%
1,90%
1,20%
-0,50%
2,70%
2,50%
1,50%
2,60%
2,50%
1,90%
3,10%
3,00%
32,87%
24,33%

5,30%
4,70%
5,20%
3,40%
1,30%
1,90%
1,30%
3,40%
2,80%
1,70%
2,20%
2,00%
1,80%
43,86%

7,46%
5,52%

1.114
46
767
1.927

48.841

9

TABLE 5: INDICATIVE PROGRAMME OF EXPENDITURE NOT ENTERED IN THE GENERAL BUDGET AND PROSPECTIVE TREND IN THE VARIOUS OWN
RESOURCES

5.1. European Development Fund (1)

Decisions (D) and payments (P)

EUR million - current prices
2001

2000

2002

2003

2004

2005

D
3000
(1) Commission communication COM(1999)688final of 13.12.1999

P
2000

P
1985

D
3000

P
2000

D
3000

D
3500

P
2500

D
3500

P
2500

D
n.d.

P
n.d.

2006

D
n.d.

P
n.d.

5.2. ECSC operating budget

EUR million - current prices
2001
147

2000
178

(1) ECSC Treaty expires on 23 July 2002

2002(1)
118

5.3. Own resources by category

% of total

2000
15

2001
12

2002
11

2003
11

2004
12

2005
12

2006
12

own

Traditional
resources
VAT
GNP
2000: Budget
2001-06: Estimates based on ceilings on appropriations for payments in the financial perspective (EU 15) and conclusions of the Berlin European Council (March 1999).

36
49

23
65

35
52

22
66

13
75

15
73

15
72

10