Communication from the Commission European Development Fund (EDF) - Estimate of the contributions needed for expenditure in the 2001 financial year and expenditure forecast for 2002, 2003, 2004 and 2005
Date: 2000-12-12
Institutions: European Commission
Subjects: European Development Fund, budget estimate, budgetary expenditure, financial year

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 12.12.2000
COM(2000)805 final

COMMUNICATION FROM THE COMMISSION

EUROPEAN DEVELOPMENT FUND
(EDF)

Estimate of the contributions needed
for expenditure in the 2001 financial year
and expenditure forecast for 2002, 2003, 2004 and 2005

EUROPEAN DEVELOPMENT FUND

(EDF)

Estimate of the contributions needed
for expenditure in the 2001 financial year
and expenditure forecast for 2002, 2003, 2004 and 2005

PRELIMINARY REMARKS

Article 6 of the Internal Agreement on the financing and administration of the seventh and
eighth EDFs stipulates, inter alia, that the Commission shall:

•

•

send the Council a statement of the payments to be made for the following year (in this
case 2001) and a schedule of calls for contributions, taking account of the EIB’s estimates
concerning the operations administered by it;

also send with the annual forecasts for contributions its estimates for expenditure for each
of the four years following the year relating to the call for contributions (2002-2005).

2

1. Introduction

In accordance with the Internal Agreements on the seventh and eighth EDFs, every year the
Commission draws up a communication setting out the financial situation of the EDFs for the
current year (in this case, 2000) and an expenditure forecast for the following year (2001).
This forecast serves to determine the estimated amount of calls for contributions by the
Member States to the EDF for 2001. The document also forecasts expenditure for the next
four years (2002-2005).

2. State of EDF expenditure for the 2000 financial year (decisions and payments)

2.1. Non-Stabex decisions stood at EUR 2 444 million at 30 September 2000. A figure of
EUR 3 850 million was forecast in Financial Information on the EDF. According to the
estimates revised in late September, and comparing two possible scenarios, the one optimistic
and the other pessimistic, by 31 December 2000, it should be reasonably possible to achieve a
volume of decisions of EUR 3 525 million, meaning EUR 325 million less than initially
forecast.

This difference is mainly due to the slowing down in implementation of cooperation with a
than anticipated duration in the
number of ACP countries, and due to the longer
implementation of the "other initiatives" and the increase in venture capital proposed by the
Commission.

Nevertheless, the above shows that the 8th EDF has now reached a cruising speed. When
comparing the estimated level of decisions for 2000 (EUR 2 846 million excluding HIPC), all
EDFs included, with that of 1999 (EUR 2 618 million) the 2000 figures are about 9 % higher.

However, one should not rule out the above mentioned pessimistic scenario, where total non-
Stabex decisions would stand at only EUR 3 100 million and total decisions (excluding HIPC)
at EUR 2 400, which is 9% less than in 1999.

at

2000

current

expenditure

30 September

(about
for
2.2. Non-Stabex
EUR 1 038 million) is less than estimated in July 2000 in Financial Information on the EDF
and in the document submitted to the Council in December 1999. At 30 September 2000 the
volume of current expenditure for 2000 was about EUR 1 835 million compared with a target
of EUR 2 385 million in payments set in July's revised estimates, EUR 550 million less than
initial forecasts. This shortfall is due mainly to the low level of disbursements made under the
national and regional
large disbursements under the
structural adjustment facility, to the tune of EUR 330 million, and the HIPC initiative, of
EUR 100 million, will lead to a substantial increase in payments by the end of the year which
will ensure that the level of EUR 1 835 million is reached.

indicative programmes. However,

2000

2.3. The figures for Stabex show an implementation rate for decisions of 56% at
30 September 2000 (EUR 223 million decided compared with the EUR 400 million forecast).
However, the low level of payments under Stabex (28% of the forecast at 30 September 2000)
should rise sharply towards the end of this year to reach 76% of the forecast.

3

EUR million

DECISIONS

PAYMENTS

Forecasts for 2000

Forecast in
Financial
Information
on the EDF
(1)

Situation at
30/09/00
(2)

Revised
forecasts at
October
(3)

Balance to
be achieved
at
31/12/2000
(3-2)

Forecast in
Financial
Information
on the EDF
(1)

Situation at
30/09/00
(2)

Revised
forecasts at
end
September
(3)

Balance to
be achieved
at
31/12/2000
(3-2)

Programmable aid

2 400

1 197.95

2 032

834.05

1 600

602.77

1 100

497.23

Nat. and reg. ind. prog.

1 700

1 052.59

1 424

371.41

1 000

512.81

Structural adjustment

Other initiatives

Sysmin

Venture capital

Interest rate subsidies

Emergency aid

Aid for refugees

Use of interest

Transfer from other funds

HIPC

Sub-total

Stabex

TOTAL

450

250

50

290

90

20

-

-

-

145.36

0

93.87

119.63

3.47

-0.53

0

0

0.36

444

164

92

250

40

20

62

0

0

298.64

164

-1.87

130.37

36.53

20.53

62

0

-0.36

450

150

30

285

60

60

-

-

-

89.96

0

22.44

101.75

13.52

22.06

1.17

0.44

675

425

0

85

200

25

50

1.17

0.44

162.19

335.04

0

62.56

98.25

11.48

27.94

0

0

0

17.80

17.80

1 000

1 028.97

1 029

0

350

256.44

356

99.56

3 850

2 443.72

3 525

1 081.28

2 385

1 038.39

1 835.41

797.02

400

223.39

350

126.61

250

70.61

190

119.39

4 250

2 667.11

3 875

1 207.89

2 635

1 109

2 025.41

916.41

1 These figures take account of decisions in the pipeline.

4

The cash position forecast for 31 December 2000 stands at about EUR 16 million. This has to
be compared with balances at the previous year-ends to see how available bank balances have
been reduced:

EUR 473.00 million end 1995
EUR 297.81 million end 1996
EUR 330.55 million end 1997
EUR 306.57 million end 1998
EUR 140.84 million end 1999.

This confirms the sustained downward trend in the balance. However, as the balance at the
end of 2000 is practically zero, provision should be made in the 2001 call for contributions for
the establishment of a minimum cash cushion to ensure sufficient room for manoeuvre in the
event that expenditure exceeds the level of the calls for contributions.

Cash position forecast at 31 December 2000

Current expenditure

EUR million

RESOURCES

EXPENDITURE

BALANCE

Carryover from 1999

Tranche 20/01/2000

Tranche 01/04/2000

Tranche 01/07/2000

Interest booked

140.84

400.00

400.00

400.00

5.75

Expenditure at 30/09/2000

Expenditure being finalised ACP (1)

Expenditure being finalised EUR (2)

1 024.82

50.00

33.98

Situation at 30/09/2000

1 346.59

1 108.80

237.37

Tranche 01/11/2000

tranche
1st
Transfer
unexpended Stabex balance

from

Expenditure forecast from 01/10 to
31/12/2000

280.00

220.00

721.26

Anticipated balance at 31/12/2000

1 846.59

1 830.06

16.53

(1) Payments effected in the ACP countries but not yet finalised.

(2) Direct payments to be finalised at 30/9/2000.

The Stabex cash balance is somewhat different as Stabex funds are governed by different
arrangements. When the 8th EDF came into force, funds for the five years of the system's
application (1995-1999) were called on under the arrangements set out in the 8th EDF
Financial Regulation (Article 54 and Annex II).

5

Stabex will come to an end when the revised Lomé IV expires as it will not be renewed in its
form in the new partnership agreement. A joint ACP-EU decision on the
present
establishment of a reserve intended to finance decisions under Stabex and Sysmin in the
period 2 August to 31 December 2000 was taken at the end of September 2000; this decision
also provides for the
transfer of the unexpended balance (EUR 1 105 672 002) from the
Stabex account to the EDF special account. This transfer will take place gradually until
31 December 2001. Outstanding payments of certain Member States must also be settled by
that date.

The following table shows that resources (1) are lower than the contributions (2) called for.
This is because Member States are able under the Financial Regulation either to pay on the
date on which the contributions were called for or to convert their contributions into an open
debt.

Cash position forecast at 31/12/2000

Stabex expenditure

EUR million

Resources

Expenditure

Balance

Carryover from 1999

Tranches 01/04 and 01/07/2000
(call = 360 (2))

Stabex debts paid

Interest booked

Expenditure at 30/09/2000

882.00

257.68(1)

92.21

36.07

Situation at 30/09/2000

1 267.96

Expenditure forecast from 1/10 to
31/12/2000

Transfer to special EDF account
(1/11/2000)

1 197.35

70.61

70.61

120.00

220.00

Anticipated
31/12/2000

balance

at

1 267.96

410.61

857.35

3. Forecasts for 2001 (decisions and payments)

After a slow start, the 8th EDF maintained its 1999 levels in 2000. The faster rate observed
over the past two years for decisions in particular will inevitably lead to a substantial increase
in payments for 2001.

The amounts relating to the 6th EDF have been entered separately since the Fund has not
been closed yet.

6

Forecasts for decisions under the 7th EDF concern only programmable aid (national and
regional indicative programmes) for EUR 400 million, as funds have been used up for the
other instruments. Payments under the 7th EDF (EUR 618 million) are expected to account
for almost 30% of non-Stabex payments forecast for 2001 (EUR 2 063 million). They are
exclusively for expenditure under the indicative programmes.

Non-Stabex decisions for the 8th EDF are expected to total EUR 2 993 million in 2001 as a
result of an increase in decisions for programmable aid (notably indicative programmes) and
the carryover to 2001 of the increase in risk capital and other initiatives.

Payments are expected to amount to EUR 1 912 million of which EUR 772 million will be for
programmable aid.

Forecasts for Stabex concern only the 8th EDF. Decisions are expected to total
EUR 240 million and payments EUR 475 million.

The total of decisions to be taken under all the EDFs comes to EUR 4 033 million; now that
they have sped up, payments are likely to reach about EUR 2 538 million next year.

Forecasts for 2001

EUR million

Decisions

Payments

EDF 6

EDF 7

EDF 8

Total EDF 6

EDF 7

EDF 8

Total

Programmable aid

NIP/RIP
SAF

Other initiatives

400
400
-
-

400
400
-
-

STABEX

SYSMIN

Venture capital

Interest rate subsidies

Emergency aid

Aid for refugees

HIPC

TOTAL

2303
1953
157
193

3103
2753
157
193

240

240

-

-

540

540

90

-

60

-

90

-

60

-

8
8
-
-

-

-

-

-

-

-

-

618
618
-
-

-

-

-

-

-

-

-

772
274
305
193

475

50

140

50

-

50

1398
900
305
193

475

50

140

50

-

50

375

375

-

-

-

-

-

-

-

-

-

-

-

-

-

-

400

400

3233

4033

8

618

1912

2538

7

The rates of disbursement since 1991 are given below. The table shows that the rate of
payments picked up in 1998 once the 8th EDF came into force and this should continue
in 2001.

EUR million

Current payments

Stabex

Total

1991

1992

1993

1994

1995

1996

1997

1998

1999

20001

20011

1002

1298

1339

1430

1260

1152

1194

1351

1255

1835

2063

189

612

33

351

303

165

19

89

20

190

475

1191

1910

1372

1781

1563

1317

1213

1440

1275

2025

2538

4. Call for contributions (rounded figures)

To cover 2001 expenditure and to re-establish a reasonable cash level, a total of
EUR 2 300 million in contributions (excluding Stabex) will be called (7th EDF scale).

Stabex expenditure will be covered by the reserve established under the joint ACP-EU
decision referred to on page 6 above. No more contributions will be called for from the
Member States. As the cash balance in the Stabex account and Member State debts are to be
transferred to the EDF special account by 31 December 2001, these amounts will be deducted
from the contributions called from the Member States for current expenditure.

Working from a cash flow forecast and taking account of Member States' wish to curb
spending, the Commission is proposing four tranches as follows:

EUR 600 million
EUR 550 million
EUR 600 million
EUR 550 million

20 January 2001
1 April 2001
1 July 2001
1 November 2001.

The sums transferred from the Stabex account will thus be deducted from these tranches, the
transfers taking place on the same dates as the calls.

1 Provisional figures.

8

As usual, these amounts may be adjusted at each three-monthly call to take account of actual
needs. Similarly, if forecasts are implemented at a more sustained rate the Commission will
make use of Article 6 of the Internal Agreement
to provide enough funding to meet
requirements.

Cash position forecast at 31/12/2001

Current expenditure

EUR million

Resources

Expenditure

Balance

Carryover from 2000

Tranche 20/01/2001

Tranche 01/04/2001

Tranche 01/07/2001

Tranche 01/11/2001

Anticipated balance at
31/12/2001

16.53

600.00

550.00

600.00

550.00

2316.53

2063.00

253.53

The table concerning the call for contributions for current expenditure (7th EDF scale) is
given in the Annex.

5. EDF expenditure forecasts 2002 to 2005

Forecasts for 2002 to 2005 are only an approximate estimate of expenditure based on the rates
in previous years.

Forecast of EDF decisions and payments

2002 to 2005

EUR mil
lion

7th

8th

9th

2002

2003

2004

2005

D

P

D

P

D

P

D

P

0

550

2 300

1 350

0

0

550

1 650

0

0

500

1 700

0

0

400

1 400

1 200

150

3 500

800

3 500

1 400

3 500

1 900

Total

3 500

2 050

3 500

3 000

3 500

3 600

3 500

3 700

In accordance with the information given by the Commission to Coreper on finalisation of the
post Lomé negotiations (doc. Financial Allocation to the Ninth EDF of 3 November 1999 and
the corrigendum of 30 November 1999)

9

CONTRIBUTIONS TO EDF FOR 2001
Current expenditure

COUNTRY

SCALE OF
CONTRIBU-
TIONS TO
7th EDF
%

20/01/01

1/04/01

1/07/01

1/11/01

TOTAL 2001

TOTAL AMOUNT
NECESSARY

- STABEX transfer

NET AMOUNT TO
BE CALLED

GERMANY

BELGIUM

DENMARK

SPAIN

FRANCE

GREECE

IRELAND

ITALY

LUXEMBOURG

NETHERLANDS

PORTUGAL

UNITED
KINGDOM

TOTAL

600 000 000.00

550 000 000.00

600 000 000.00

550 000 000.00

2 300 000 000.00

221 000 000.00

221 000 000.00

221 000 000.00

222 000 000.00

885 000 000.00

379 000 000.00

329 000 000.00

379 000 000.00

328 000 000.00

1 415 000 000.00

25.96

98 388 400.00

85 408 400.00

98 388 400.00

85 148 800.00

367 334 000.00

3.96

2.07

5.90

24.37

1.22

0.55

12.96

0.19

5.57

0.88

15 008 400.00

13 028 400.00

15 008 400.00

12 988 800.00

7 845 300.00

6 810 300.00

7 845 300.00

6 789 600.00

22 361 000.00

19 411 000.00

22 361 000.00

19 352 000.00

56 034 000.00

29 290 500.00

83 485 000.00

92 362 300.00

80 177 300.00

92 362 300.00

79 933 600.00

344 835 500.00

4 623 800.00

2 084 500.00

4 013 800.00

1 809 500.00

4 623 800.00

2 084 500.00

4 001 600.00

1 804 000.00

17 263 000.00

7 782 500.00

49 118 400 00

42 638 400.00

49 118 400.00

42 508 800.00

183 384 000.00

720 100.00

625 100.00

720 100.00

623 200.00

21 110 300.00

18 325 300.00

21 110 300.00

18 269 600.00

3 335 200.00

2 895 200.00

3 335 200.00

2 886 400.00

2 688 500.00

78 815 500.00

12 452 000.00

16.37

62 042 300.00

53 857 300.00

62 042 300.00

53 693 600.00

231 635 500.00

100.00

379 000 000.00

329 000 000.00

379 000 000.00

328 000 000.00

1 415 000 000.00

10