Amending letter n° 3 to the preliminary draft budget for 2007 – General  statement of revenue - Statement of revenue and expenditure by section - Section III - Commission
Date: 2006-10-27
Institutions: Directorate-General for Budget, European Commission
Subjects: European Commission, budgetary expenditure, budgetary resources, common agricultural policy, preliminary draft EC budget













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52006SC1378

Amending letter n° 3 to the preliminary draft budget for 2007 – General  statement of revenue - Statement of revenue and expenditure by section - Section III - Commission  /* SEC/2006/1378 final */  








[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |Brussels, 27.10.2006EC(2006) 1378 finalAMENDING LETTER No 3TO THE PRELIMINARY DRAFT BUDGET 2007GENERAL STATEMENT OF REVENUESTATEMENT OF REVENUE AND EXPENDITURE BY SECTION Section III - Commission(presented by the Commission)AMENDING LETTER No 3TO THE PRELIMINARY DRAFT BUDGET 2007GENERAL STATEMENT OF REVE NUESTATEMENT OF REVENUE AND EXPENDITURE BY SECTION Section 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 3 to the preliminary draft budget for 2007 for the reasons set out in the explanatory memorandum.  TABLE OF CONTENTS1. Introduction 42. Preservation and management of natural ressources 52.1. Summary table 52.2. Agricultural expenditure (market related expenditure and direct payments) 52.2.1. Overall picture 52.2.2. Euro-dollar exchange rate 62.2.3. Detailed comments 62.3. International fisheries agreement 102.4. Changes in the nomenclature and budgetary remarks 11SUMMARY TABLE BY HEADING OF THE FINANCIAL FRAMEWORK 12GENERAL STATEMENT OF REVENUESTATEMENT OF REVENUE AND EXPENDITURE BY SECTIONThe general statement of revenue and the statement of revenue and expenditure by section is forwarded separately via the SEI-BUD system. An English version of the general statement of revenue and the statement of revenue and expenditure by section is attached for information as a budgetary annex.1. INTRODUCTIONThe Interinstitutional Agreement on budgetary discipline and sound financial management[2] provides that, "if it considers it necessary, the Commission may present to the two arms of the budgetary authority an ad hoc letter of amendment to update the figures underlying the estimate of agricultural expenditure in the preliminary draft budget (PDB) and/or to correct, on the basis of the most recent information available concerning fisheries agreements in force on 1 January of the financial year concerned, the amounts and their breakdown between the appropriations entered in the operational items for international fisheries agreements and those entered in reserve." This letter of amendment must be sent to the budgetary authority by the end of October.The Commission presents herewith this ad hoc amending letter (AL No 3/2007) to the preliminary draft budget 2007, containing a careful, line by line update on the estimated needs for agricultural expenditure. In addition to changing market factors, the AL also incorporates legislative decisions adopted in the agricultural sector since the PDB was drawn up, revised estimates of needs for direct payments, as well as any proposals, which are expected to have effect during the coming budget year.The AL is based, in the same way as the PDB itself, on the needs of the Community as a whole. As far as the market measures are concerned, no breakdown of the appropriations between Member States is available. In addition, it must be stressed that these appropriations are to be understood as a forecast and not as an objective of expenditure. The actual expenditure will depend, in particular, on real market conditions, on the actual euro-dollar exchange rate, and on the rhythm of the payments by Member States. Since this is compulsory expenditure, whatever the amount a Member State is obliged to pay in accordance with the regulations – within the limits set by the financial framework - will be reimbursed in full.The euro-dollar rate used, in accordance with Council Regulation No 1290/2005 on the financing of the Common Agricultural Policy, is based on the average rate observed between 1 July and 30 September 2006. It comes to 1,27 (EUR 1=USD 1,27) and results in an increase in needs of about EUR 78 million compared to the PDB.For clarification and transparency purposes, some budgetary comments have been updated.The change for International fisheries agreements relates to the entry into force of the Fisheries Partnership Agreement with Mauritania, but without modifying the overall amount foreseen for fisheries agreements. It is proposed to reduce the reserve line by an amount of EUR 86 million and to increase the corresponding operational line by the same amount.The needs for agricultural expenditure amount to EUR 42 832 million, a reduction of EUR 852 million compared to the PDB. Overall needs for Heading 2 are estimated at EUR 56 366 million, leaving a margin of EUR 1 985 million in commitment appropriations below the corresponding ceiling of the Financial Framework.2. PRESERVATION AND MANAGEMENT OF NATURAL RESSOURCES2.1. Summary tablePDB 2007 | AL 3/2007 | Difference |EUR million | (a) | (b) | (c)=(b)-(a) |CA | PA | CA | PA | CA | PA |Total Appropriations Heading 2 | 57.218 | 55.683 | 56.366 | 54.832 | -852 | -852 |Financial Framework | 58.351 | 58.351 |margin | 1.133 | 1.985 | 852 | 852 |Of which |Agricultural expenditure (market related expenditure and direct payments) | 43.684 | 43.408 | 42.832 | 42.556 | -852 | -852 |International fisheries agreements | 194 | 194 | 194 | 194 | 0 | 0 |of which: -"Operational line" | 59 | 59 | 145 | 145 | 86 | 86 |- "Reserve" | 135 | 135 | 49 | 49 | -86 | -86 |2.2. Agricultural expenditure (market related expenditure and direct payments)2.2.1. Overall pictureThe purpose of the AL n°3/2007 is to ensure that the agricultural budget is based on the most up-to-date economic data and legislative framework. By the month of October, the Commission has at its disposal a first indication of the level of production (harvests) for 2006, which is the basis for any reliable estimate of the budgetary needs for 2007.As in the past, the Commission has carefully reviewed all its estimates of agricultural expenditure line by line. Besides taking into account market factors, this AL also incorporates any legislative decisions adopted in the agricultural sector since the PDB was drawn up, as well as proposals.The total appropriations for Agricultural Expenditure are lower than estimated in the PDB 2007 (- EUR 852 million). This saving mainly results from a downward revision of needs for Direct Aids (chapter 05 03 - EUR 782 million). The needs for Interventions on Agricultural Markets (chapter 05 02) decrease by EUR 71 million compared with the PDB, and include some important changes within the chapter (increases and reductions depending on the sector).It is worth mentioning that part of the decreased needs results from revised estimates of the assigned revenue[3]. Significant additional revenue is expected to come from clearance procedures (+ EUR 238 million) and from the milk superlevy (+ EUR 43 million).2.2.2. Euro-dollar exchange rateIn accordance with Article 21 of Council Regulation No 1290/2005 on the financing of the Common Agricultural Policy, the euro-dollar rate to be used for the letter of amendment is the average rate over the most recent three-month period. In the case of this letter of amendment, this means the period between 1 July and 30 September 2006. The average exchange rate recorded is EUR 1 = USD 1,27 which is higher than the rate used for the preliminary draft budget (EUR 1 = USD 1,20). This change in the rate has the effect of increasing needs by about EUR 78 million (EUR 68 million for market measures for cereals, EUR 10 million for sugar).2.2.3. Detailed comments05 02 Interventions in agricultural marketsappropriations in preliminary draft budget: EUR 5 698 millionappropriations after letter of amendment: EUR 5 628 millionFavourable prospects for some agricultural markets explain the decrease in appropriations for cereals (- EUR 178 million), refunds on non-Annex I products (- EUR 45 million) and beef (-EUR 35 million). A reduction in needs is also entered for fruits and vegetables (-EUR 83 million) and milk products (- EUR 31 million).In contrast, there are increases in a number of sectors . The wine sector is absorbing EUR 76 million more appropriations than initially foreseen because of additional needs for market measures, in particular distillation. Additional appropriations for sugar (+ EUR 88 million) are mainly due to the export refund payments from the previous year taking longer to pay than anticipated and lower sales from intervention stocks. Exceptional market support measures decided after the occurrence of avian influenza are the main reason for the increased needs for the poultry and egg sector (+ EUR 53 million).The comments below explain the main differences between the appropriations of the PDB and those of the AL.05 02 01 – Cereals (appropriations – EUR 178 million)appropriations in preliminary draft budget: EUR 694 millionappropriations after letter of amendment: EUR 516 millionThe decrease of nearly 25% in the budgetary needs for cereals is brought about by a combination of positive market developments which have occurred since the PDB 2007 was drawn up. Particular climatic circumstances have reduced the EU cereals output for 2006/2007 by approximately 19.5 million tonnes compared to earlier estimations, resulting in a positive effect on intervention costs. Also world market prices have increased considerably which leads to better sales prices and decreased needs for export refunds. Improved market conditions have triggered increased sales from intervention. Finally, a drop in operational costs for intervention storage of cereals has been recorded. All these elements have a sizeable effect on the budgetary needs for the sector leading to downward adjustments for export refunds for cereals (- EUR 62 million) and intervention storage of cereals (-EUR 155 million). However, due to a strengthening of the euro, accounting for an additional EUR 68 million in the cereals sector, it is not possible to realise the full benefit of the positive market developments. The table below illustrates the present situation for cereals in intervention as compared to that of the PDB.PDB (million t) | AL (million t) |Opening Stocks Purchases Sales Closing Stocks Average Stocks | 16.6 8.1 5.5 19.2 18.9 | 11.3 8.4 8.0 11.7 12.0 |Based on the most recent execution data for budget 2006, production refunds for starch are expected to increase by EUR 39 million compared to the PDB 2007.05 02 05 – Sugar (appropriations + EUR 88 million)appropriations in preliminary draft budget: EUR 235 millionappropriations after letter of amendment: EUR 323 millionThe net increase in appropriations for the sugar sector is justified by a number of market-related conditions.In the case of export refunds (+ EUR 39 million), the increase is due to the additional quantities (+ 160 000 tonnes) exported during marketing campaign 2005/06, and to delays in payments which increase the part to be charged to the 2007 budget. Additionally, the higher euro-dollar exchange rate leads to an extra expenditure of EUR 10 million. However, as world prices show a positive trend, estimations in the PDB of 342 dollar/tonne are now increased to 360 dollar/tonne, generating some savings.With regard to storage of sugar (+ EUR 50 million), increased imbalances in the sugar market are forecasted, compared to the PDB. it is foreseen that 100 000 additional tonnes will be in storage at the beginning of the period (1 October 2006) and 130 000 tonnes less will be sold during the period (1 October 2006 – 30 September 2007).05 02 08 – Fruit and vegetables (appropriations - EUR 83 million)appropriations in preliminary draft budget: EUR 1 407 millionappropriations after letter of amendment: EUR 1 324 millionForecast expenditure for fruit and vegetables is reduced in comparison with the PDB.The appropriations for processed tomatoes show a reduction in needs of EUR 76 million due to a decrease of the quantities foreseen for processing (from 11,5 million tonnes in the PDB to 9 million tonnes in the AL).The appropriations for processed citrus fruits show a slight decrease (EUR 7 million), in particular, because of a further reduction in the aid (overshoot of the ceiling for oranges) and an adaptation in the quantities of fruit to be processed.05 02 09 – Products of the wine-growing sector (appropriations + EUR 76 million)appropriations in preliminary draft budget: EUR 1 411 millionappropriations after letter of amendment: EUR 1 487 millionThe EU wine sector is still characterised by a difficult market situation with large stocks. With a similar harvest expected for the 2006/07 campaign as for the previous year, the needs assessment is revised upwards to reflect that required in 2005/06. Compared to the PDB 2007, the needs assessment is higher for all market measures (Export refunds: + EUR 10 million; Storage of wine and must: + EUR 20 million; Distillation: + EUR 63 million; Storage of alcohol: + EUR 14 million; Aid for the use of must: + EUR 28 million), while structural measures related to the production potential are expected to be less costly than initially expected (Permanent abandonment: - EUR 14 million; Restructuring and conversion: - EUR 45 million).05 02 11 04 – POSEI (excluding direct aids and FISH 11 02 03) (appropriations + EUR 95 million)appropriations in preliminary draft budget: EUR 117 millionappropriations after letter of amendment: EUR 212 millionThe increase in this budget line (+ EUR 95 million) needs to be seen in relation to the reduction for budget line 05 03 02 50 (- EUR 95 million). On the basis of the new POSEI programmes it was possible to make a better distinction between market-related expenditure and direct aids. Consequently, a shift of market-related expenditure has been made to budget line 05 02 11 04.05 02 12 – Milk and milk products (appropriations – EUR 31 million)appropriations in preliminary draft budget: EUR 618 millionappropriations after letter of amendment: EUR 587 millionUpdated market forecasts for the dairy sector still confirm the analysis of the PDB 2007 showing good market prospects for most milk products, despite a slightly less favourable development for butterfat. In particular, high prices for skimmed milk powder, both internally and on the world markets, allowed the reduction to zero of both the level of export refunds and of the aid for use in animal feed. In the latter case, good market prices in the beef sector are also a contributing factor. Compared to the PDB 2007, appropriations asked for internal disposal measures of skimmed milk could therefore be reduced by – EUR 40 million. On the other hand, expenditure for measures related to butterfat are expected to be somewhat higher, explaining the small increases for export refunds (+ EUR 6 million) and intervention storage of butter and cream (+ EUR 3 million).Another modification compared to the PDB 2007 concerns the superlevy to be paid by milk producers for overshooting their reference quantities. Based on the most recent figures for the quota year 2005/06, the Commission proposes EUR 349 million, i.e. EUR 43 million more than in the PDB, to be accounted as assigned revenue.05 02 13 – Beef and veal (appropriations - EUR 35 million)appropriations in preliminary draft budget: EUR 152 millionappropriations after letter of amendment: EUR 117 millionThe market situation in the EU beef and veal sector continues to be characterised by sustained demand and good prices. While some years ago the sector was heavily relying on large quantities to be exported with refunds and on public intervention, the situation has completely changed. The structural surplus has disappeared, and the favourable development of internal demand is reflected not only in prices but also by steadily increasing imports and lower exports. Based on updated market forecasts, the Commission proposes to reduce appropriations for export refunds of meat (- EUR 23 million) and live animals (-EUR 9 million). The decision to abolish refunds for the export of slaughter animals was already incorporated in the initial PDB proposal. A small additional saving (- EUR 3 million) compared to the PDB has been identified for the budget item financing exceptional support measures (Over Thirty Months Scheme and Older Cattle Disposal Scheme measures related to BSE) on the basis of the most recent uptake figures.05 02 15 07 – Exceptional market-support measures for the poultrymeat and eggs sector (appropriations + EUR 60 million)appropriations in preliminary draft budget: p.m.appropriations after letter of amendment: EUR 60 millionFollowing the occurrences of highly pathogenic avian influenza (H5N1) in areas near the Community and in several Member States at the end of 2005 and beginning of 2006, exceptional market measures were decided in July and August 2006 since the poultry meat market suffered serious disruption due to a sharp and significant fall in consumption combined with a fall in prices. Only a small part of the financial impact (around EUR 82 million in total) will be paid out in the 2006 budget exercise due to the time needed for implementing the measures in the Member States. For the budget 2007, the financial needs are estimated at EUR 60 million, which was not foreseen in the PDB.05 03 Direct Aidsappropriations in preliminary draft budget: EUR 37 661 millionappropriations after letter of amendment: EUR 36 879 millionThe appropriations for this chapter are revised downwards by EUR 782 million. Decoupled direct aids decrease (- EUR 513 million) partly because the most recent information available has allowed for more realistic estimations of needs for the Single Payment Scheme (as opposed to the budgeting of expenditure ceilings foreseen in the Community legislation) (-EUR 239 million), and partly because of increased revenue from clearance of accounts (-EUR 238 million). The appropriations for coupled other direct aids are reduced by EUR 269 million, mostly due to the decreased needs for the compensatory aid for bananas (-EUR 195) and the shift of EUR 95 million to the POSEI budget line in chapter 05 02.05 03 01 – Decoupled direct aids (appropriations – EUR 513 million)appropriations in preliminary draft budget: EUR 30 709 millionappropriations after letter of amendment: EUR 30 196 millionFor the Single Payment Scheme (SPS) it is assumed that Member States new to the scheme will not execute the budget up to the ceiling. Hence, a reduction of EUR 239 million has been applied. Also, the budgetary ceilings for the SPS decreased by EUR 29 million since the PDB was drawn up[4]. For the Single Area Payment Scheme (SAPS), the annual financial envelopes[5] were reduced (- EUR 174 million) to separate the amounts for the sugar payment referred to in Article 143ba of Regulation (EC) No 1782/2003. For this purpose, an additional item has been created, intended to cover expenditure under the separate sugar payment[6] for the new Member States applying SAPS (+ EUR 167 million). The difference (-EUR 7 million) stems from a correction made regarding the dairy restructuring reserve.05 03 02 – Other direct aids (appropriations – EUR 269 million)appropriations in preliminary draft budget: EUR 6 484 millionappropriations after letter of amendment: EUR 6 215 millionFollowing the latest communications received from Member States, the appropriations for energy crops (05 03 02 27) have been revised upwards (+ EUR 16 million). Thus, it is estimated that the 45 EUR/ha aid will be paid for 1 181 000 ha.The appropriations for banana compensatory aid (05 03 02 30) show a significant saving of EUR 195 million. No needs are foreseen for the 2007 campaign because of the reform of the sector. Appropriations on account of the new system for 2007 will be charged on the 2008 budget. As far as the 2006 campaign is concerned, the second allotment to be paid in 2007 is less than foreseen in the PDB because of higher prices, and because of a smaller quantity of bananas produced. The 2006 production decreased from 740 000 tonnes to 670 000 tonnes; the aid changed from 291 EUR/t to 161 EUR/t.Appropriations for budget line 05 03 02 39 are set at EUR 20 million (PDB=p.m.). It concerns the Additional amount for sugar foreseen in Chapter 10 f of Council Regulation (EC) No 1782/2003 as modified by Council Regulation (EC) No 319/2006[7] that establishes a transitional (five years) coupled aid for beet growers who continue beet production in Member States that reduce their sugar quota by more than 50%. This aid corresponds to some 30% of the revenue loss, in addition to the 60% which has already been covered by the decoupled sugar payment. Portugal and Italy are eligible for this aid. Eligible production is 778 705,8 tonnes (IT) and 34 500 tonnes (PT). Gross aid (before modulation) is 28,26 EUR/t (PT) and 25,64 EUR/t (IT).POSEI – Community Support Programmes – budget line 05 03 02 50 – see remarks 05 02 11 042.3. International fisheries agreementThe Commission proposes to amend the PDB 2007 as follows:Budget article 11 03 01 - International fisheries agreements: EUR 145 221 500 in commitment and payment appropriations for agreements in force by 1 January 2007 (+ EUR 86 000 000 compared to EUR 59 221 500 in the PDB 2007).Budget item 40 02 41 02 - Differentiated appropriations (compulsory expenditure): in chapter 40 02 - Reserves for financial interventions: EUR 48 778 500 in commitment and payment appropriations for International fisheries agreements (- EUR 86 000 000 compared to EUR 134 778 500 in the PDB 2007).The net overall financial impact of this transaction is zero. The amount corresponds to the financial contribution of the year 2007 for the Fisheries Partnership Agreement between the EC and the Islamic Republic of Mauritania which will enter into force retroactively on 1 August 2006 after approval by the Council.2.4. Changes in the nomenclature and budgetary remarksExpenditure |Line | Action | Appropriations AL 3/2007 |Commitments | Payments |05 03 01 02 SAPS (Single Area Payment Scheme) | Split into: |05 03 01 02 SAPS (Single Area Payment Scheme) | 2 111 000 000 | 2 111 000 000 |05 03 01 03 Separate Sugar Payment | 167 000 000 | 167 000 000 |11 02 01 Intervention in fishery products | Split into: |11 02 01 01 Interventions in fishery products – New measures | 15 500 000 | 15 500 000 |11 02 01 02 Interventions in fishery products – Completion of earlier measures | p.m. | p.m. |11 02 02 Irregularities (Fisheries markets) | Split into: |11 02 02 01 Irregularities (Fisheries markets) – New measures | p.m. | p.m. |11 02 02 02 Irregularities (Fisheries markets) – Completion of earlier measures | p.m. | p.m. |11 02 03 Fisheries programme for the outermost regions | Split into: |11 02 03 01 Fisheries programme for the outermost regions – New measures | p.m.1 | p.m.2 |11 02 03 02 Fisheries programme for the outermost regions – Completion of earlier measures | p.m. | p.m. |Revenue |6 8 0 Temporary restructuring amounts | Split into: |6 8 0 1 Temporary restructuring amounts – Assigned revenue | p.m. |6 8 0 2 Irregularities concerning the temporary restructuring fund – Assigned revenue | p.m. |1 An appropriation of EUR 15 000 000 is entered in Item 40 02 41 02.2 An appropriation of EUR 15 000 000 is entered in Item 40 02 41 02.In addition to these nomenclature changes, the budget remarks of the following are updated:Item 05 02 11 04 – POSEI (excluding direct aids and FISH 11 02 03)Item 05 03 02 50 – POSEI – Community support programmesItem 05 03 02 51 – POSEI – Other direct aids and earlier regimesItem 05 03 02 52 – POSEI –Aegean IslandsArticle 05 07 02 – Settlement of disputesSUMMARY TABLE BY HEADING OF THE FINANCIAL FRAMEWORKFinancial framework Heading/subheading | 2007 Financial framework | PDB 2007 (including AL n°1 and 2/2007[8]) | AL 3/2007 | PDB 2007 + AL 1, 2 and 3/2007 ||CA |PA |CA |PA |CA |PA |CA |PA | | 1. SUSTAINABLE GROWTH | | | | | | | | | | 1a. Competitiveness for growth and employment |8 918 000 000 | |9 316 483 511 |6 947 304 511 | | |9 316 483 511 |6 947 304 511 | |1b. Cohesion for growth and employment |45 487 000 000 | |45 486 558 504 |37 798 703 678 | | |45 486 558 504 |37 798 703 678 | | Total |54 405 000 000 | |54 803 042 015 |44 746 008 189 | | |54 803 042 015 |44 746 008 189 | | Margin | | |101 957 985[9] | | | |101 957 985 | | | 2. PRESERVATION AND MANAGEMENT OF NATURAL RESOURCES | | | | | | | | | | Of which market related expenditure and direct payments |45 759 000 000 | |43 684 007 000 |43 407 987 756 |-851 700 000 |-851 700 000 |42 832 307 000 |42 556 287 756 | | Total |58 351 000 000 | |57 217 576 036 |55 683 381 736 | | |56 365 876 036 |54 831 681 736 | | Margin | | |1 133 423 964 | | | |1 985 123 964 | | | 3. CITIZENSHIP, FREEDOM, SECURITY AND JUSTICE | | | | | | | | | | 3a. Freedom, Security and Justice |637 000 000 | |571 339 000 |426 989 000 | | |571 339 000 |426 989 000 | |3b. Citizenship | 636 000 000 | |603 675 000 |680 252 652 | | |603 675 000 |680 252 652 | | Total |1 273 000 000 | |1 175 014 000 |1 107 241 652 | | |1 175 014 000 |1 107 241 652 | | Margin | | |97 986 000 | | | |97 986 000 | | | 4. EU AS A GLOBAL PARTNER[10] |6 578 000 000 | | 6 702 527 000 |7 447 469 578 | | | 6 702 527 000 |7 447 469 578 | | Margin | | | 110 000 000 | | | | 110 000 000 | | | 5. ADMINISTRATION[11] |7 039 000 000 | |7 002 283 649 |7 002 183 649 | | |7 002 283 649 |7 002 183 649 | | Margin | | | 112 716 351 | | | | 112 716 351 | | | 6. COMPENSATION |445 000 000 | |444 646 152 |444 646 152 | | |444 646 152 |444 646 152 | | Margin | | | 353 848 | | | | 353 848 | | | TOTAL |128 091 000 000 |123 790 000 000 |127 345 088 852 |116 430 930 956 |-851 700 000 |-851 700 000 |126 493 388 852 |115 579 230 956 | | Margin | | |1 556 438 148 |7 435 069 044 | | |2 408 138 148 |8 286 769 044 | |[1] OJ L 248, 16.9.2002, p. 1.[2] OJ C 139, 14.6.2006, p.1[3] Article 180 of the Financial Regulation lays down that, as from 1.1.2007, negative agricultural expenditure will be replaced by revenue assigned to the EAGF. This implies that appropriations for budget lines that may receive assigned revenue must show a "net" amount after deduction of the estimated assigned revenue. The accounting principle behind this procedure is that expenditure linked to assigned revenue can only be executed if and when the revenue will be collected. Therefore, expenditure financed by means of assigned revenue cannot be shown in the budget.[4] Annex IV of Commission Regulation (EC) No 1156/2006, OJ L 208, 29.7.2006, p.3.[5] Annex V of Commission Regulation (EC) No 1156/2006, OJ L 208, 29.7.2006, p.3.[6] Annex VI of Commission Regulation (EC) No 1156/2006, OJ L 208, 29.7.2006, p.3.[7] OJ L 58, 28.2.2006, p. 32.[8] AL 1/2007 did not have any effect on expenditure, only on revenue.[9] The EGF is not included in the calculation of the margin under Heading 1a.[10] The 2007 margin for heading 4 does not take into account the appropriations related to the Emergency Aid Reserve (EUR 234,5 million).[11] For calculating the margin under the ceiling for heading 5, account is taken of the footnote (1) of the financial framework 2007-2013 for an amount of EUR 76 million for the staff contributions to the pensions scheme.