Amending letter n° 1 to the preliminary draft budget for 2006 - General statement of revenue - Statement of revenue and expenditure by section - Section III - Commission
Date: 2005-10-19
Institutions: Directorate-General for Budget, European Commission
Subjects: ACP countries, European Commission, budgetary expenditure, budgetary resources, preliminary draft EC budget, protocol on sugar













EUR-Lex - 52005SC1269 - EN






Important legal notice




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52005SC1269

Amending letter n° 1 to the preliminary draft budget for 2006 - General statement of revenue - Statement of revenue and expenditure by section - Section III - Commission  /* SEC/2005/1269 final */  








[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |Brussels, 19.10.2005SEC(2005) 1269 finalAMENDING LETTER N° 1 TO THE PRELIMINARY DRAFT BUDGET FOR 2006GENERAL STATEMENT OF REVENUE STATEMENT OF REVENUE AND EXPENDITURE BY SECTION Section III – Commission  AMENDING LETTER N° 1 TO THE PRELIMINARY DRAFT BUDGET FOR 2006GENERAL STATEMENT OF REVENUESTATEMENT OF REVENUE AND EXPENDITURE BY SECTIONSection III – CommissionHaving regard to:-  the Treaty establishing the European Community, and in particular Article 272 thereof,-  the Treaty establishing the European Atomic Energy Community, and in particular Article 177 thereof,-  the Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities[1], and in particular Article 34 thereof,the European Commission hereby presents to the budgetary authority the amending letter No 1 to the preliminary draft budget for 2006 for the reasons set out in the explanatory memorandum.TABLE OF CONTENTS1. Introduction 41.1. Background 42. Budget lines, legal bases and remarks 53. Effect on the Heading 4 margin 7SUMMARY TABLE BY HEADING OF THE FINANCIAL PERSPECTIVE 8GENERAL STATEMENT OF REVENUESTATEMENT OF REVENUE AND EXPENDITURE BY SECTIONThe general statement of revenue and the statement of revenue and expenditure by section are forwarded separately via the SEI-BUD system. An English version of the general statement of revenue and of the statement of revenue and expenditure by section is attached as a budgetary annex by way of example.EXPLANATORY MEMORANDUMIntroductionThis Amending Letter contains the following elements:-  the mobilisation of new funds for an amount of EUR 40 million in commitment appropriations and EUR 21,2 million in payment appropriations, to support the accompanying measures for Sugar Protocol countries affected by the reform of the EU sugar regime during 2006.BackgroundThe EU sugar reform, with its proposed price cuts, may have a significant impact with broad socio-economic consequences, and may lead to adjustment needs, in ACP countries that are signatories to the Sugar Protocol, and which have been relying on preferential sugar exports to the EU, in most cases since 1975. Therefore, the Commission committed itself to offering both trade measures and development assistance to help the Sugar Protocol countries to adapt. The trade measures are being established in negotiations on the Economic Partnership Agreements. The development assistance was the subject of the Commission's proposal to the European Parliament and the Council for a regulation establishing accompanying measures for Sugar Protocol countries affected by the reform of the EU sugar regime[2].That regulation will supply the legal basis for delivering assistance in 2006. In order to maximise chances of a successful transition, it is essential to facilitate opportunities for the Sugar Protocol countries to anticipate as much as possible the impact of the sugar reform, which is proposed to be implemented as early as July 2006. Restructuring and reconversion can best mitigate the likely impact of the reform if they succeed in preventing major disruptions of the level of economic activity. Similarly, social measures, for example favouring labour mobility, need to be implemented as much as possible in advance of significant changes.Considering the complexity of the restructuring and diversification processes to be undertaken in the Sugar Protocol countries, the assistance scheme is to cover a relatively long term. The Commission has proposed eight years. Actions under the regulation will thus continue beyond 2006, and they will be covered by the "Development Cooperation and Economic Cooperation Instrument". In the event that this instrument does not enter into force on 1 January 2007, an extension of the regulation will be enacted.The countries to be covered by the scheme are the 18 ACP countries that are signatories to the Sugar Protocol, and export sugar at present to the EU. Considering the differences between the countries, in terms of the types of issues to be faced and the possible responses, a broad range of support options should be offered, to be adapted to each specific situation. In terms of areas of support, the range should cover the needs of countries which will aim to upgrade the competitiveness of their sugar sector, as well as of those for which the adaptation process requires diversifying into alternative economic activities, around or instead of the sugar sector. Considering the multifunctional role of the sugar sector, especially in certain areas, these accompanying measures should also cover broader social, economic, and environmental consequences of the reform, if necessary.The process of elaborating a national strategy has already progressed in several Sugar Protocol countries. However, countries which, in 2006, have not yet devised a suitable adaptation strategy should be eligible in that year for financial assistance with the aim of developing such a strategy.In terms of budget, the sugar reform creates specific, new challenges to Sugar Protocol countries, which require additional support for their adaptation process. In 2006, the total budget for the assistance scheme needs to allow the Sugar Protocol countries to undertake priority investment and programmes in the framework of the above-mentioned adaptation strategy. The budget will be divided amongst the countries according to their different needs, which depend in particular on the impact of the sugar reform on their sugar industry, and on the importance of sugar in their economy. A limited amount should also be reserved to ensure adequate administrative capacity to manage the assistance scheme effectively.BUDGET LINES, LEGAL BASES AND REMARKSThe global amount needed (EUR 40 000 000 in 2006) is split in two components: expenditure on administrative management (EUR 1 200 000) and operational expenditure (EUR 38 800 000). These amounts will be included under items 31 01 40 and 31 02 41 01 of the chapter 31 02 "Reserves for financial interventions".Item 21 01 04 02 — Other cooperation measures and sectoral strategies — Expenditure on administrative managementFiguresAppropriations 2006 | Letter of amendment No. 1 | New amount |16 900 000 | 0[3] | 16 900 000[4] |Article 21 03 19 — Adjustment support for sugar protocol countriesFiguresAppropriations 2006 | Letter of amendment No. 1 | New amount |Commitments | Payments | Commitments | Payments | Commitments | Payments |p.m. | p.m. | p.m.[5] | p.m.[6] | p.m.[7] | p.m.[8] |The likely schedule of payments vis-à-vis commitments is as follows:Commitments | Payments |2005 | 2006 | 2007 | 2008 | Subsequent years and others |Pre-2005 commitments still outstanding |Commitment appropriations made available again and/or carried over from 2004 |Appropriations 2005 |Appropriations 2006 | 38 800 000[9] | 20 000 000 | 18 800 000 |Total | 38 800 000 | 20 000 000 | 18 800 000 |Operational expenditure is to be made under the separate, dedicated article (21 03 19 – Adjustment support for sugar protocol countries ), which was proposed with the Preliminary Draft Budget for 2006 to anticipate the upcoming expenditure, and which was included in the Draft Budget. When the Preliminary Draft Budget for 2006 was adopted by the Commission, the draft regulation establishing accompanying measures was still not adopted.The existing legal base under article 21 03 19 therefore needs to be updated and replaced by:"Proposal for a regulation of the European Parliament and of the Council establishing accompanying measures for Sugar Protocol countries affected by the reform of the EU sugar regime (COM(2005)266 final of 22.6.2005)".Administrative support expenditure is to be included in item 21 01 04 02 - Other cooperation measures and sectoral strategies – Expenditure on administrative management .The last sentence of the remarks under item 21 01 04 02 needs to be updated to mention also article 21 03 19 in the list of articles covered. New text:"This appropriation covers …. 21 02 13, 21 02 14 and 21 03 19 ".Article 31 01 40 — Administrative reserveFiguresAppropriations 2006 | Letter of amendment No. 1 | New amount |11 080 000 | 1 200 000 | 12 280 000 |Item 31 02 41 01 — Differentiated appropriations (non-compulsory expenditure)FiguresAppropriations 2006 | Letter of amendment No. 1 | New amount |Commitments | Payments | Commitments | Payments | Commitments | Payments |320 320 000 | 93 550 000 | 38 800 000 | 20 000 000 | 359 120 000 | 113 550 000 |EFFECT ON THE HEADING 4 MARGINThe ceiling for Heading 4 in 2006 is already exceeded by EUR 123,5 million. The additional recourse to the flexibility instrument for EUR 40 million will result in a negative margin totalling EUR 163,5 million.  SUMMARY TABLE BY HEADING OF THE FINANCIAL PERSPECTIVEFinancial perspective Heading/subheading | 2006 Financial perspective | APB 2006 | PDAL 1/2006 | APB 2006 + PDAL 1/2006 ||CA |PA |CA |PA |CA |PA |CA |PA | |1. AGRICULTURE | | | | | | | | | |- Agricultural expenditure |45 502 000 000 | |43 641 320 000 |43 641 320 000 | | |43 641 320 000 |43 641 320 000 | |- Rural development and accompanying measures |7 116 000 000 | |7 771 000 000 |7 711 300 000 | | |7 771 000 000 |7 711 300 000 | |Total |52 618 000 000 | |51 412 320 000 |51 352 620 000 | | |51 412 320 000 |51 352 620 000 | | Margin | | |1 205 680 000 | | | |1 205 680 000 | | |2. STRUCTURAL OPERATIONS | | | | | | | | | |- Structural funds |38 523 000 000 | |38 522 922 880 |32 134 099 237 | | |38 522 922 880 |32 134 099 237 | |- Cohesion fund |6 094 000 000 | |6 032 082 110 |3 505 500 000 | | |6 032 082 110 |3 505 500 000 | |Total |44 617 000 000 | |44 555 004 990 |35 639 599 237 | | |44 555 004 990 |35 639 599 237 | | Margin | | |61 995 010 | | | |61 995 010 | | |3. INTERNAL POLICIES |9 385 000 000 | |9 218 359 185 |8 836 227 649 | | |9 218 359 185 |8 836 227 649 | | Margin | | |166 640 815 | | | |166 640 815 | | |4. EXTERNAL ACTION |5 269 000 000 | |5 392 500 000 |5 357 195 920 |+40 000 000 |+21 200 000 |5 432 500 000 |5 378 395 920 | | Margin | | |-123 500 000 | | | |-163 500 000 | | |5. ADMINISTRATION |6 708 000 000 | |6 697 756 487 |6 697 756 487 | | |6 697 756 487 |6 697 756 487 | | Margin | | |10 243 513 | | | |10 243 513 | | |6. RESERVES | | | | | | | | | |- Guarantee reserve |229 000 000 | |229 000 000 |229 000 000 | | |229 000 000 |229 000 000 | |- Emergency aid reserve |229 000 000 | |229 000 000 |229 000 000 | | |229 000 000 |229 000 000 | |Total |458 000 000 | | 458 000 000 |458 000 000 | | | 458 000 000 |458 000 000 | | Margin | | |0 | | | |0 | | |7. PREACCESSION STRATEGY |3 566 000 000 | |2 480 600 000 |3 152 150 000 | | |2 480 600 000 |3 152 150 000 | | Margin | | | 1 085 400 000 | | | | 1 085 400 000 | | |8. COMPENSATIONS |1 074 000 000 | |1 073 500 332 |1 073 500 332 | | |1 073 500 332 |1 073 500 332 | | Margin | | | 499 668 | | | | 499 668 | | | TOTAL |123 695 000 000 |119 292 000 000 |121 288 040 994 |112 567 049 625 |+40 000 000 |+21 200 000 |121 328 040 994 |112 588 249 625 | | Margin | | |2 406 959 006 |6 724 950 375 | | |2 366 959 006 |6 703 750 375 | |[1] OJ L 248, 16.9.2002, p. 1.[2] COM(2005)266 final of 22.6.2005: Proposal for a regulation of the European parliament and of the Council establishing accompanying measures for Sugar Protocol countries affected by the reform of the EU sugar regime.[3] An appropriation of EUR 1 200 000 is entered in Item 31 01 40.[4] An appropriation of EUR 1 200 000 is entered in Item 31 01 40.[5] An appropriation of EUR 38 800 000 is entered in Item 31 02 41 01.[6] An appropriation of EUR 20 000 000 is entered in Item 31 02 41 01.[7] An appropriation of EUR 38 800 000 is entered in Item 31 02 41 01.[8] An appropriation of EUR 20 000 000 is entered in Item 31 02 41 01.[9] This appropriation is entered in Item 31 02 41 01.