Draft amendment of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management
Date: 2008-12-02
Institutions: European Commission
Subjects: budgetary discipline (EU), developing countries, economic recession, financial management, food price, price increase

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 2.12.2008 
COM(2008) 834 final 

Draft amendment of the Interinstitutional Agreement of 17 May 2006 between the 
European Parliament, the Council and the Commission 

on budgetary discipline and sound financial management 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

The  recent  developments  in  food  and  commodity  prices  have  raised  concerns  especially  as 
regards  their  impact  for  developing  countries.  The  Commission  proposed  to  create  a  new 
facility for rapid response to soaring food prices in developing countries (COM(2008)0450 – 
2008/0149(COD). 

Having  examined  the  scope  for  reallocating  expenditure  within  Heading  4  as  well  as  the 
possible  use  of  all  other  available  instruments  (the  Instrument  for  Stability,  the  Flexibility 
instrument), the Emergency Aid Reserve was identified as one of the suitable instruments for 
financing the facility. 

Since the remaining amount of the Emergency Aid Reserve for the year 2008 is insufficient to 
cover the needs of the food facility, an increase is necessary in order to enable the Reserve to 
contribute to the food facility financing. 

The  annual  amount  of  the  Emergency  Aid  Reserve  is  fixed  at  EUR  221  million  in  constant 
prices for the duration of the financial framework. The Council and the European Parliament 
agreed  that  it  shall  be  increased  to  EUR  479.218  million  (in  current  prices),  uniquely  and 
exceptionally for the year 2008. 

Therefore  point  25  of  the  Interinstitutional  Agreement  setting  the  annual  amount  of  the 
Emergency Aid Reserve shall be amended accordingly. 

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Draft amendment of the Interinstitutional Agreement of 17 May 2006 between the 
European Parliament, the Council and the Commission 
on budgetary discipline and sound financial management 

The  European  Parliament,  the  Council  of  the  European  Union  and  the  Commission  of  the 
European Communities,  

Whereas: 

(1) 

(2) 

(3) 

(4) 

The  recent  developments  in  food  and  commodity  prices  have  raised  concerns 
especially as regards their impact for developing countries. The Commission proposed 
to  create  a  new  facility  for  rapid  response  to  soaring  food  prices  in  developing 
countries1 and the two arms of budgetary authority, at the conciliation meeting of 21 
November 2008, have agreed to provide part of the financing for this facility from the 
Emergency Aid Reserve. 

Since  the  remaining  amount  of  the  Emergency  Aid  Reserve  for  the  year  2008  is 
insufficient to cover the needs of the food facility, an increase is necessary in order to 
enable the Reserve to contribute to the food facility financing. 

In  order  to  address  that  exceptional  situation  the  Emergency  Aid  Reserve  should  be 
increased to EUR 479.218 million in current prices, uniquely and exceptionally for the 
year 2008. 

Point  25  of  the  Interinstitutional  agreement  on  budgetary  discipline  and  sound 
financial management should therefore be amended accordingly, 

have agreed as follows: 

In point 25 the following sentence shall be added to the first subparagraph:  

"This amount shall be exceptionally increased to EUR 479.218 million for the year 2008 in 
current prices." 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

For the Commission 
The President 

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COM(2008)0450 – 2008/0149(COD) 

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