Communication from the Commission - European Development Fund (EDF) - Estimate of the contributions needed for expenditure in the 2002 financial year and expenditure forecast for 2003, 2004, 2005 and 2006
Date: 2001-12-17
Institutions: European Commission
Subjects: European Development Fund, budget estimate, budgetary expenditure, financial year

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 17.12.2001
COM(2001) 780 final

COMMUNICATION FROM THE COMMISSION

EUROPEAN DEVELOPMENT FUND
(EDF)

Estimate of the contributions needed
for expenditure in the 2002 financial year
and expenditure forecast for 2003, 2004, 2005 and 2006

 EUROPEAN DEVELOPMENT FUND

(EDF)

Estimate of the contributions needed
for expenditure in the 2002 financial year
and expenditure forecast for 2003, 2004, 2005 and 2006

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 2002) 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
(2003-2006).

2

1. 

INTRODUCTION

In accordance with the Internal Agreements on the seventh and eighth EDFs, every year the
Commission  draws up a  communication to  the Council setting  out the  financial  situation  of
the  EDFs  for  the  current  year  (in  this  case,  2001)  and  an  expenditure  forecast  for  the
following  year  (2002).  This  forecast  serves  to  determine  the  estimated  amount  of  calls  for
contributions  by  the  Member  States  to  the  EDF  for  2002.  The  document  also  forecasts
expenditure for the next four years (2003-2006).

2. 

2.1

EDF EXPENDITURE FOR THE 2001 FINANCIAL YEAR (DECISIONS AND PAYMENTS)

Decisions

Non-Stabex  decisions  stood  at  EUR  613  million  at  30  September  2001.  A  figure  of
EUR 2 000 million for the whole year was forecast in Financial Information on the EDF last
June.  According  to  the  revised  estimates  of  October  2001,  and  comparing  optimistic  and
pessimistic  scenarios,  the  volume  of  decisions  which  can  reasonably  be  achieved  by
31 December 2001 is EUR 1 600 million, EUR 400 million less than initially forecast, or 80%
of the earlier estimates.

There are many reasons for this:

– 

– 

– 

– 

– 

– 

Most  of  the  countries  which  have  been  most  active  are  beginning  to  run  out  of  8th
EDF  funds,  while  those  countries  which  still  have  funds  left  often  encounter
problems in drawing up projects;

The 9th EDF programming phase, with which the Commission's delegations are now

closely involved, is taking longer than foreseen;

Unlike  previous  years,  the  figures  in  this  document  for  projects  carried  out  as  at
30 September  2001  (both  decisions  and  payments)  only  cover  final  decisions  (and
payments), and exclude any decisions (and payments) which are still in the pipeline
(that is, decisions with a value of EUR 563 million as at 30 September);

Decisions  have  traditionally  been  spread  unevenly  across  the  calendar  year:  there  is
always a substantial increase in the number of decisions made in the last months of
the year;

Experience shows that the quantity of decisions declines over the programming phase

of an EDF, as is currently the case with the 9th EDF;

The  Commission  services  have  been  restructured  at  the  beginning  of  the  exercise

(creation of EuropeAid Co-operation Office).

The  marked  fall-off  compared  with  previous  years  is  a  natural  consequence  of  the  cycle  of
successive EDFs, as the diagrams in Annex 1 show. This trend will be reversed when the 9th
EDF comes into force.

3

2.2

Payments

Non-Stabex current expenditure for 2001 at 30 September 2001 (about EUR 891 million) is in
line with the estimates given in June in Financial  Information on the EDF. At that date, the
volume of current expenditure for 2001 was about EUR 1 636 million, which is in line with
the  target  of  EUR  1 683  million  in  payments  set  in  June's  revised  estimates,  being  3%  less
than  initial  forecasts.  However,  analysis  of  individual  instruments  reveals  significant
differences between programmable and non-programmable aid. The programmable aid sector
delivered  well  below  estimates,  and  this  shortfall  was  largely  made  up  by  the  generally
better-than-expected  performance  of  non-programmable  aid 
instruments,  for  which
substantial disbursements are scheduled by year end.

2.3

STABEX

Since the expiry of the revised Lomé IV agreement, the Stabex instrument no longer exists.As
no new decisions under this instrument could be taken as of 1 January 2001, the number of
decisions  for  the  year  2001  was  zero.  However,  payments  are  still  being  made  under  this
instrument,  to  cover  decisions  made  prior  to  the  expiry  date.  These  payments  totalled
EUR 278  million  at  30  September  2001,  representing  88%  of  the  estimated  amount
(EUR 317 million). In the light of this performance to date, and since significant sums should
be disbursed  between now  and the end of the  year,  the  estimate  for  31  December  2001  has
been revised upwards to  EUR  352  million.  This  positive  revision  for  the  Stabex  instrument
confirms the good results expected for all non-programmable aid instruments (cf. point 2.2).

4

Forecasts for 2001

EUR million

DECISIONS

PAYMENTS

"Financial
Information
" estimates
(1)

Situation at
30-09-011
(2)

Revised
forecasts at
October (3)

Balance at
31-12-2001
(3-2)

"Financial
Information
" estimates
(1)

Situation at
30-09-011
(2)

Revised
forecasts at
October (3)

Balance at
31-12-2001
(3-2)

Programmable aid

1 513

441.96

1 178

736.04

1 133

733.26

1 100

366.74

Nat. and reg. ind. prog.

1 170

340.03

579.97

1 009

474.24

Structural adjustment

Sysmin

Risk capital

Interest rate subsidies

Emergency aid

Aid for refugees

Use of interest

Transfer from other funds

HIPC

Sub-total

Stabex

TOTAL

920

258

101.93

156.07

-0.32

-0.32

0.00

126.,65

325

198.35

0.30

12.66

29.32

1.95

0.12

0.00

25

20

29.32

24.95

0.12

0

24.70

7.34

0.00

23.00

0.00

0.00

343

137

220

50

20

0

0

0

60

124

50

150

30

20

0

0

0

300

259.02

30.32

79.61

9.24

16.26

6.83

1.36

14.07

0.00

700

400

31

175

30

20

13

2

15

225.76

140.98

0.68

95.39

20.76

3.74

6.17

0.64

0.93

250

250.00

2 000

612.64

1602.07

989.43

1 683

890.95

1 636

745.05

0

-1.59

-1.59

0.00

317

277.71

352

74.29

2 000

611.05

1 600.48

989.43

2 000

1 168.66

1 988

819.34

1 These figures do not take account of decisions in the pipeline.

5

                                                
3. 

CASH POSITION FORECAST AT 31 DECEMBER 2001

3.1. 

Cash position forecast at 31 December 2001: current expenditure (EDF current
expenditure account)

The cash position forecast for 31 December 2001 stands at about EUR 260.44 million. This
should be compared with balances at previous year-ends to see how available bank balances
have been reduced:

– 

EUR 473.00 million at end 1995

EUR 297.81 million at end 1996
EUR 330.55 million at end 1997
EUR 306.57 million at end 1998
EUR 140.84 million at end 1999
EUR 783.51 million at end 2000.

The unusually high cash position at the end of 2000 was due to:

– 

– 

– 

a lower than expected level of current expenditure for the whole of the 2000 financial

year;

the fact that Structural Adjustment Facility payments amounting to EUR 130 million,
which  should  have  been  made  just  before  the  end  of  the  financial  year,  were  not
actually  made  until  early  January  2001;  these  payments  were  therefore  included  in
the 2001 financial year accounts;

during  2000  EUR  350 million  were  transferred  from  the  Stabex  account  to  the  EDF
current expenditure account to finance the HIPC initiative. This transfer was carried
out in August 2000, at a time when the cash position on the EDF current expenditure
account was very low, so as to avoid the funding of the HIPC initiative impacting on
the calls for contributions, with a view to finalising the operation at a later date. This
operation has since been finalised: as a result, the transfer of EUR 221 million from
Stabex to the EDF account, planned for each of the first two quarters of 2001, was
suspended. The two sums are included in the table below purely for the record, and
have been discounted when calculating the totals. The transfer of EUR 350 million is
in addition to the transfer of EUR 220 million from the Stabex account to the current
expenditure account carried out at the time of the last call for contributions in 2000.

Since  the  cash  position  recorded  at  the  end  of  the  year  2000  was  therefore  untypical,  the
position  expected  for  end  2001  confirms  the  declining  trend  which  the  Commission  has
pursued.

6

Cash position forecast at 31 December 2001: current expenditure

EUR million

RESOURCES

EXPENDITURE

BALANCE

Carryover from 2000

Anticipatory  transfer  from  Stabex  to  EDF
current  expenditure  account  to  cover  HIPC
initiative

Tranche 20/01/2001

Tranche 01/04/2001

Tranche 01/07/2001

Transfer 
20/01/2001 (finalisation of *)

from  Stabex 

to  EDF  account

Transfer 
01/04/2001 (finalisation of *)

from  Stabex 

to  EDF  account

Transfer 
01/07/2001

from  Stabex 

to  EDF  account

Interest booked

Expenditure at 01/10/2001

Expenditure being finalised ACP3

Expenditure being finalised EUR4

433.51

350.00*

379.00

200.00

200.00

(221.00)2

(221.00)2

112.00

12.94

1 025.61

50.00

15.42

Situation at 30/09/2001

1 687.45

1 091.03

596.42

Tranche 01/11/2001

Transfer 
01/11/2001

from  Stabex 

to  EDF  account

Expenditure  forecast  from  01/10/2001 
31/12/2001

to

0.00

221.00

556.98

Anticipated balance at 31/12/2001

1 908.45

1 648.01

260.44

2 For the record: cf. point 3.1 above
3 Payments effected in the ACP countries but not yet finalised
4 Direct payments to be finalised at 30/9/2000

7

                                                
3.2. 

Cash position forecast: Stabex expenditure

The  Stabex  cash  balance  is  somewhat  different,  as  Stabex  funds  are  governed  by  different
arrangements (amounts and deadlines are laid down in the Financial Regulation applicable to
the 4th ACP-EC Convention). 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, the last call being made during the year 2000.

Stabex  comes  to  an  end  when  the  revised  Lomé  IV  expires,  as  it  was  not  renewed  in  its
present  form  as  part  of  the  new  partnership  agreement.  A  joint  ACP-EU  decision  on  the
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 current expenditure account. This transfer is taking place gradually
up  to  31  December  2001.  Outstanding  payments  of  certain  Member  States  must  also  be
settled by that date. Thus, in 2000 EUR 570 million were transfered from the Stabex account
to the EDF current expenditure account; and these transfers will continue in 2001, when EUR
333  million  are  to  be  transfered  over  the  course  of  the  year.  As  shown  in  the  table  below,
these operations together with expenditure made using  this instrument should mean that the
balance of the Stabex account will stand at EUR 619 million at the  end of  December 2001.
This  sum  will  be  transfered  to  the  EDF  current  expenditure  account  at  the  end  of  the  2001
financial  year,  save  for  EUR  250  million  which  will  be  held  as  a  reserve  against
disbursements  due  to  be  made  to  countries  with  which  cooperation  has  been  suspended
(Sudan and Togo), amounting to EUR 369 million.

EUR million

Resources

Expenditure

Balance

Carryover from 2000

Settlement Stabex debts

Interest booked

Expenditure at 30/09/2001

Transfer  to  EDF  current  account
(1/07/2001)

648.23

348.62

74.45

Situation at 30/09/2001

1 071.30

Expenses being finalised

Transfer  to  EDF  current  account
(1/11/2001)

Stabex  credit  to  be  called  in  by
31-12-01

233,52

277.71

112.00

389.71

75.00

221.00

681.59

Anticipated 
31/12/2001

balance 

at

1 304,82

685.71

619,11

8

4. 

FORECASTS FOR 2002 (DECISIONS AND PAYMENTS)

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

Forecasts  for  decisions  under  the  7th  EDF  concern  only  programmable  aid  (national  and
regional indicative programmes) for EUR 70 million, as funds have been used up for the other
instruments.  Payments  under  the  7th  EDF,  which  have  now  fallen  to  EUR  350  million,  are
diminishing every year, and represent only 15% of total anticipated payments for 2002 (EUR
2 345 million). They are exclusively for expenditure under the indicative programmes.

Decisions  under  the  8th  EDF  should  amount  to  EUR  2 030  million  in  2002,  including
decisions  funded  by  transfers  from  the  8th  EDF  general  reserve  to  the  9th  EDF
(EUR 1 185 million, of which EUR 415 million are for macro-economic support).

Payments  should  amount  to  EUR  1  965  million,  including  EUR  600  million  for
programmable  aid,  and  EUR  400  million  drawn  from  funds  transfered  from  the  8th  EDF
general reserve to the 9th EDF (of which EUR 300 million are for macro-economic support).

The  Stabex  instrument  has  expired.  Decisions  and  payments  under  this  instrument  have
therefore ceased. The reserve of EUR 250 million which has been  established (cf. point  3.2
above) is unlikely to be paid out in 2002.

The total of decisions to be taken under all the EDFs comes to EUR 2 100 million; payments
are likely to reach about EUR 2 345 million next year.

EUR million

Decisions

Payments

EDF 6

EDF 7

EDF 8

Total EDF 6

EDF 7

EDF 8

Total

Programmable aid

NIP/RIP
SAF

STABEX

SYSMIN

RISK CAPITAL

INTEREST 
SUBSIDIES

RATE

EMERGENCY AID

AID FOR REFUGEES

HIPC

TOTAL

-
-
-

-

-

-

-

-

-

-

70
70
-

1 720
1 295
425

1 790
1 365
425

30
30
-

350
350
-

1 400
600
800

1 780
980
800

-

-

-

-

-

-

-

-

-

-

-

225

225

25

25

-

-

-

-

60

60

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

175

175

25

20

15

25

20

15

330

330

0

70

2 030

2 100

30

350

1 965

2 345

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 trend should continue
in 2002.

9

EUR million

Current payments

Stabex

Total

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

20015

20025

1002

1298

1339

1430

1260

1152

1194

1351

1255

1477

1636

2345

189

612

33

351

303

165

19

89

20

71

352

0

1191

1910

1372

1781

1563

1317

1213

1440

1275

1548

1988

2345

5 Estimated

10

                                                
5. 

2002 CALL FOR CONTRIBUTIONS (ROUNDED FIGURES)

To  cover  2002  expenditure  and  to  maintain  a  reasonable  cash  level,  a  total  of  EUR  2  000
million  in  contributions  will  be  called  (7th  and  8th  EDF  scales),  to  which  the  transfer  of
residual Stabex funds at end 2001 will add a further EUR 369 million (cf. point 3.2).

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

– 

– 

– 

– 

EUR 500 million on 20 January 2002 (all on the 7th EDF);

EUR 500 million on 1 April 2002 (all on the 7th EDF);

EUR 500 million on 1 July 2002 (EUR 281 million on the 7th and EUR 219 million
(on the 8th EDF);

EUR 500 million on 1 November 2002 (all on the 8th EDF).

At 30 September 2001, EUR 1 281 million were still to be called for the 7th EDF. Since the
last call for contributions in 2001, which was due to be made on 1 November 2001, has been
reduced to zero, the whole of this amount will be called over the first three tranches of 2002,
and funding for the 8th EDF budget will commence with the third call in 2002.

As usual, these amounts may be adjusted upwards or downwards 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 December 2002

Current expenditure

EUR million

Resources

Expenditure

Balance

Carryover from 2001

Transfer of outstanding
Stabex 
at
31/12/2001

funds 

Tranche 20/01/2002

Tranche 01/04/2002

Tranche 01/07/2002

Tranche 01/11/2002

Anticipated  balance  at
31/12/2002

260.44

369.11

500.00

500.00

500.00

500.00

2 629.55

2 345.00

284.55

11

The  table  concerning  the  call  for  contributions  for  current  expenditure  (7th  and  8th  EDF
scales) can be found under point 7.

6. 

EDF EXPENDITURE FORECASTS 2003 TO 2006

Forecasts for 2003 to 2006 are only an approximate estimate of expenditure based on the rates
in previous years.

Forecast of EDF decisions and payments

2003 to 2006

EUR
million

7th

8th

9th

2003

2004

2005

2006

D

P

D

P

D

P

D

P

50

400

300

0

200

1800

150

1500

0

100

0

900

0

0

0

600

2330

400

2900

1000

2800

2000

2700

2400

Total

2780

2500

3050

2700

2900

2900

2700

3000

12

7. 

CONTRIBUTIONS TO EDF FOR 2002
 CURRENT EXPENDITURE

7th EDF
SCALE

8th EDF
SCALE

20/01/02

1/04/02

1/07/02

1/11/02

TOTAL 2002

COUNTRY

%

%

VII

VII

VII

VIII

TOTAL

VIII

GERMANY

25.96

23.36

129.800.000

129.800.000

73.403.600

51.158.400

124.562.000

116.800.000

500.962.000

BELGIUM

DENMARK

SPAIN

FRANCE

GREECE

IRELAND

ITALY

3.96

2.07

5.90

3.92

2.14

5.84

19.800.000

19.800.000

11.137.600

8.584.800

19.722.400

19.600.000

10.350.000

10.350.000

6.390.700

4.686.600

11.077.300

10.700.000

78.922.400

42.477.300

29.500.000

29.500.000

16.118.000

12.789.600

28.907.600

29.200.000

117.107.600

24.37

24.30

121.850.000

121.850.000

68.293.700

53.217.000

121.510.700

121.500.000

486.710.700

1.22

0.55

1.25

0.62

6.100.000

6.100.000

3.880.200

2.737.500

6.617.700

6.250.000

2.750.000

2.750.000

1.408.000

1.357.800

2.765.800

3.100.000

25.067.700

11.365.800

12.96

12.54

64.800.000

64.800.000

36.365.600

27.462.600

63.828.200

62.700.000

256.128.200

LUXEMBOURG

NETHERLANDS

PORTUGAL

0.19

5.57

0.88

0.29

5.22

0.97

950.000

950.000

486.400

635.100

1.121.500

1.450.000

4.471.500

27.850.000

27.850.000

15.413.700

11.431.800

26.845.500

26.100.000

108.645.500

4.400.000

4.400.000

2.340.800

2.124.300

4.465.100

4.850.000

18.115.100

UNITED
KINGDOM

AUSTRIA

FINLAND

SWEDEN

16.37

12.69

81.850.000

81.850.000

45.761.700

27.791.100

73.552.800

63.450.000

300.702.800

2.65

1.48

2.73

5.803.500

5.803.500

13.250.000

3.241.200

3.241.200

7.400.000

5.978.700

5.978.700

13.650.000

19.053.500

10.641.200

19.628.700

TOTAL

100.00

100.00

500.000.000

500.000.000

281.000.000

219.000.000

500.000.000

500.000.000

2.000.000.000

13

Annex 1

DECISIONS

6th EDF
7th EDF
8th EDF

3.500.000

3.200.000

2.900.000

2.600.000

2.300.000

2.000.000

1.700.000

1.400.000

1.100.000

800.000

500.000

200.000

-100.000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

PAYMENTS

6th EDF
7th EDF
8th EDF

2.000.000

1.800.000

1.600.000

1.400.000

1.200.000

1.000.000

800.000

600.000

400.000

200.000

0

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

14