Proposal for a Decision of the European Parliament and of the Council on the mobilisation of the flexibility instrument according to point 24 of the Interinstitutional Agreement of 6 May 1999
Date: 2002-07-10
Institutions: European Commission
Subjects: Structural Funds, administrative expenditure, commitment of expenditure, common fisheries policy, financial aid, fishing vessel, general budget (EU), vocational retraining

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Proposal for a Decision of the European Parliament and of the Council on the mobilisation of the
flexibility instrument according to point 24 of the Interinstitutional Agreement of 6 May 1999

(2003/C 20 E/09)

COM(2002) 399 final

(Submitted by the Commission on 10 July 2002)

EXPLANATORY STATEMENT

The fisheries agreement between the European Union and the Kingdom of Morocco has not been renewed,
and as a result the fishing fleets covered by the agreement have been forced to stop their operations.

Following the Commission's (1) proposal, the Council adopted at the end of 2001 a programme (2) for
actions aiming to supplement the actions carried out in the context of the interventions of the Structural
Funds in the Member States affected by the non-renewal of the fisheries agreement with Morocco. This
action therefore falls under heading 2 ‘structural measures’, sub-heading ‘Structural Funds’ of the financial
perspectives.

This action amounts to 197 million EUR, of which 170 million have already been entered in the 2002
budget (budget line B2-200) and were financed by the mobilisation of the flexibility instrument. A joint
statement by Parliament, Council and the Commission of 21 November 2001 (3) stipulates that the 27
remaining million will be entered in the 2003 budget.

On 28 May 2002 the Commission proposed an ambitious reform programme for the European fisheries
policy to safeguard the future of this sector (4). This reform of the fisheries policy will have important
financial consequences since the cost of the scrapping of the vessels was estimated at 712 million EUR.
Given the financial resources that Member States had already programmed under the FIFG for the
scrapping of vessels and if the amounts initially planned for export or mixed companies are repro-
grammed, the Commission evaluates the additional amount necessary to carry out the scrapping of
vessels at 272 million EUR over the period 2003-2006. The proposal
involves therefore a broad
operation of reprogramming of means available within the framework of the Structural Funds, which
Member States will be invited to carry out within the framework of the midterm review in 2004. Thus
Member States should be able to re-deploy 240 of the 272 million EUR intended for the demolition of the
vessels. In the light of the timetable for the mid-term review of the Structural Funds, which will not take
place until 2004, an additional amount of 32 million EUR is necessary in 2003 to start the reform of the
fisheries policy. These 32 million EUR will be used to provide additional incentives to the owners of
vessels to initiate without delay the decommissioning of over-capacity of the fleets.

In accordance with the inter-institutional agreement of 6 May 1999 on budgetary discipline and the
improvement of the budgetary procedure, the commitments relating to the structural measures do not
leave any margin available under the ceiling of heading 2 of the financial perspectives. The 27 million EUR
for the Spanish and Portuguese fleets affected by the non-renewal of the agreement with Morocco and the
32 million EUR for the supplementary measure for demolition will have therefore to be financed beyond
the ceiling of the heading 2 of the financial perspectives.

(1) Proposal for a Council Regulation aiming to promote the conversion of the vessels and the fishermen who were, up
to 1999, dependent on the fisheries agreement with Morocco (Document COM(2001) 384 final of 18 July 2001).
(2) Regulation (EC) No 2561/2001 of the Council at its meeting on 17 December 2001 aiming to promote the
conversion of the vessels and the fishermen who were, up to 1999, dependent on the fisheries agreement with
Morocco.

(3) Doc. SN 4641/01 of the conciliation meeting at the time of the 2nd reading of the 2002 budget by the Council.
(4) COM(2002) 181, 186, 187, 190 of 28 May 2002.

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the time of

In addition, the PDB 2003 (1) mentioned the difficulties encountered in 2003 in the field of administrative
expenditure to finance the necessary preparations to the enlargement so that all the European institutions
are able to ensure as from 1 January 2004 the functioning of an enlarged European Union of 25 Member
States and the application of the ‘acquis communautaire’. This expenditures had not been envisaged in
led the
Berlin at
Commission to propose in the PDB, on the basis of the most recent estimates of all the institutions, an
overshooting of the ceiling of heading 5 of the financial perspectives to the tune of 65,814 million EUR
for additional administrative expenditure connected with preparations to the enlargement. These estimates
were updated recently by the second report on ‘the development of the heading V’ (2) established by the
Secretaries-General of the institutions at the request of the budgetary authority (3) and transmitted on
31 May 2002 According to these new forecasts, the ceiling of the heading 5 would be exceeded by 74,2
million EUR in 2003.

the discussions on the financial perspectives 2000-2006. This fact

The present proposal is based on the deficit of 65,814 million EUR included as a basis of calculation in the
PDB. The exact figure shall be determined taking into account all possibilities to advance expenditure from
2003 to 2002 and after having exploited all possibilities of redeployment within the heading including
between institutions, as foreseen in the Inter-institutional agreement. Also, further examination of rein-
forced inter-institutional cooperation and the creation of offices open to other institutions will be carried
out after a proposal by the Commission of an amending letter for this purpose to be presented in autumn.
The budgetary authority will then have all the elements, including the implementation of the 2002 budget,
to examine and decide. If still necessary the amount finally to be taken from the flexibility instrument
should be confirmed. The repartition over the institutions and expenditure lines will thus be determined in
the course of the budgetary procedure.

The inter-institutional Agreement envisages in its point 24 the mobilisation of the flexibility instrument to
‘allow financing, for a given financial year and up to the amount indicated (the annual ceiling amounting
to 200 million EUR), of clearly identified expenditure which could not be financed within the limits of the
ceilings available for one or more other headings’. Although the inter-institutional Agreement also
stipulates that ‘the flexibility instrument should not, as a rule, be used to cover the same needs two
years running’, it is recommended nevertheless to make an exception for the residual 27 million EUR
for the Spanish and Portuguese fishing fleets, since its financing in 2003 was agreed via joint statement in
November 2001 and should be continued under heading 2 as initiated in 2002.

The Commission proposes therefore to have recourse to the flexibility instrument to finance the specific
action for the conversion of the Spanish and Portuguese fleets, the Community emergency measure for the
destruction of the fishing vessels as well as the overshooting of the ceiling for administrative expenditure
necessary for the preparation of the institutions to the enlargement.

(1) SEC(2002) 464 of 30 April 2002.
(2) Letters from Mr O'Sullivan to Mrs. Rodríguez Herrer and Mr. Wynn of 31 May 2002, ref. D (2002) 100187 and

PBDGBUDG/100188.

(3) Joint letter from Mrs. Rodríguez Herrer and of Mr. Wynn of 20 March 2002 (ref. 302878).

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

whereas:

Having regard to the Interinstitutional Agreement of 6 May
1999 between the European Parliament, the Council and the
Commission on budgetary discipline and improvement of the
budgetary procedure (1), and in particular point 24 thereof,

Having regard to the proposal from the Commission,

(1) OJ C 172, 18.6.1999, p. 1.

(1) Following the non renewal of

the fisheries agreement
between the European Union and the Kingdom of
Morocco, a specific action for
the
Spanish and Portuguese fleets was decided for an amount
of EUR 197 million. Of this total the budgetary authority
agreed on 21 and 22 November at the conciliation meeting
between the Council and a delegation of the European
Parliament, with the participation of the Commission, to
enter EUR 27 million in the 2003 budget.

the conversion of

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(2) According to Commission proposals of 28 May 2002 for
reform of
the common European fisheries policy to
safeguard the future of this sector and in particular the
Community emergency measure for
the scrapping of
for 2003, a reduction in the fishing
fishing vessels
capacity by means of scrapping of vessels is required.
The Financial
for Fisheries Guidance will
therefore be reprogrammed and it is necessary to provide
for a supplementary measure for an amount of EUR 32
million for 2003 to accompany and encourage these
measures.

Instrument

(3) The actions for the conversion of Spanish and Portuguese
fleets and for scrapping of vessels fall under heading 2
‘structural measures’, sub-heading ‘Structural Funds’ of the
financial perspectives.

on

budgetary

the budgetary procedure,

(4) In accordance with point 12, paragraph 2 of the Interinsti-
and
tutional Agreement
improvement of
the appro-
priations foreseen for actions covered by the heading 2
‘structural measures’ of the financial perspectives do not
leave any margin under the ceiling. Consequently it
is
necessary to use the flexibility instrument to cover these
expenditure.

discipline

(5) In particular, for the action of conversion of the Spanish
it is then appropriate to make an
and Portuguese fleets,
the Interinstitutional
exception to the general
Agreement, providing that:
flexibility instrument
should not, as a rule, be used to cover the same needs
two years running.’

rule of
‘the

(6) In 2003, Community institutions have to assume costs
connected with the effective administrative preparation to
the enlargement and to the application of
the ‘acquis
communautaire’
in ten new Member States in order to
ensure as from 1 January 2004 the smooth operation of
an enlarged European Union.

(7) These

related to enlargement were not
expenditures
foreseen in heading 5 of
financial perspectives.
Accordingly, the flexibility instrument should be used to
provide such expenditures. The Community institutions

the

intend to examine the actual needs for 2003 in autumn,
taking into account the implementation in 2002, the possi-
bilities to front-load some expenditures initially foreseen for
2003, and to explore the redeployment within and between
institutions and all possibilities of inter-institutional coop-
eration. The budgetary authority will then conclude for
which amount and budget lines to mobilise the flexibility
instrument,

HAVE DECIDED AS FOLLOWS:

Article 1

For the general budget of the European Union for the financial
the flexibility
year 2003 (hereinafter
instrument shall be used to provide the sum of EUR 124,814
million in commitment appropriations.

‘the 2003 budget’),

From this amount:

(a) EUR 27 million shall be used for the financing of the
targeted measure for the promotion of the conversion of
vessels and of fishermen who were, until 1999, dependent
on the fisheries agreement with Morocco, covered by the
‘structural measures’ heading of the financial perspectives,
under line B2-200 heading of the 2003 budget.

(b) EUR 32 million shall be used for

the financing of
supplementary measures for the demolition of the fishing
vessels in the framework of the reform of the common
fisheries policy,
line
B2-201, which is to be created by a letter of amendment
in the 2003 budget.

to be covered by a new budget

(c) [EUR 65,814 million] shall be assigned to the adminis-
trative expenditure of the Community institutions for the
preparation to enlargement, according to the distribution
set out in the Annex.

Article 2

This decision shall be published in the Official Journal of the
European Communities at the same time as the 2003 budget.

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Distribution of the [EUR 65 814 million] for the preparation to the enlargement on the various Community
institutions

ANNEX