Preliminary draft amending budget N° 1 to the general budget 2009 - Statement of expenditure by section - Section III - Commission
Date: 2009-01-23
Institutions: Directorate-General for Budget, European Commission
Subjects: EU aid, European Commission, Romania, amending budget, budgetary expenditure, flood, fund (EU), preliminary draft EC budget

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.1.2009 
COM(2009) 22 final 

PRELIMINARY DRAFT AMENDING BUDGET N° 1 
TO THE GENERAL BUDGET 2009 

STATEMENT OF EXPENDITURE BY SECTION 
Section III - Commission 

(presented by the Commission) 

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PRELIMINARY DRAFT AMENDING BUDGET N° 1 
TO THE GENERAL BUDGET 2009 

STATEMENT OF EXPENDITURE BY SECTION 
Section III - Commission 

Having regard to: 

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– 

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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 Communities1, 
as  last  amended  by  Council  Regulation  (EC,  Euratom)  No  1525/20072,  and  in 
particular Article 37 thereof, 

The European Commission hereby presents to the budgetary authority the Preliminary Draft 
Amending Budget No 1 to the 2009 budget. 

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OJ L 248, 16.9.2002, p. 1. 
OJ L 343, 27.12.2007, p. 9. 

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

Introduction .................................................................................................................. 4 

Mobilisation of the EU Solidarity Fund....................................................................... 4 

Romania: Floods .......................................................................................................... 4 

Financing...................................................................................................................... 5 

CHANGES TO THE STATEMENT OF EXPENDITURE BY SECTION 

The changes to the statement of expenditure by section are forwarded separately via the SEI-
BUD system. An English version of the changes to the statement of expenditure by section is 
attached for information as a budgetary annex. 

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1. 

INTRODUCTION 

Preliminary  Draft  Amending  Budget  (PDAB)  No 1  for  the  year  2009  covers  the  following 
elements: 

–  Mobilisation of the EU Solidarity Fund for an amount of EUR 11,8 million in commitment 

and payment appropriations relating to the effects of floods affecting Romania. 

–  A  corresponding  reduction  in  payment  appropriations  of  EUR 11,8 million  from  the  line 

13 03 16 (European Regional Development Fund (ERDF)-Convergence). 

2. 

MOBILISATION OF THE EU SOLIDARITY FUND 

2.1. 

Romania: Floods  

In July 2008 a fairly extensive part of Romania was affected by heavy rain, leading to severe 
flooding and landslides. Within the 10-week deadline set by Article 4 of Council Regulation 
(EC) No 2012/20023, the Romanian authorities applied for financial assistance from the EU 
Solidarity Fund. 

The  Commission  carried  out  a  thorough  examination  of  the  application  in  accordance  with 
Council Regulation (EC) No 2012/2002 and in particular Articles 2, 3 and 4 thereof. The most 
important points of the assessment can be summarised as follows: 

(1) 

(2) 

(3) 

(4) 

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The  application  was  presented  to  the  Commission  on  1  October  2008,  within  the 
deadline of 10 weeks after the first damage was recorded on 24 July 2008. 

The  disaster  is  of  natural  origin.  The  Romanian  authorities  estimated  the  total  direct 
damage  at  EUR 471,4 million.  This  amount  represents  approximately  83 %  of  the 
normal  threshold  for  mobilising  the  Solidarity  Fund  applicable  to  Romania  of 
EUR 566,8 million (i.e. 0,6 % of Romania’s GNI). Total direct damage is the basis for 
the calculation of the amount of financial assistance. The financial assistance may only 
be used for essential emergency operations as defined in Article 3 of the Regulation. 

As  total  damage  remains  below  the  normal  threshold  the  application  is  based  on  the 
so-called  “extraordinary  regional  disaster”  criterion  laid  down  in  Article  2(2),  final 
subparagraph  of  Regulation  (EC)  No 2012/2002  setting  out  the  conditions  for 
mobilising  the  Solidarity  Fund  “under  exceptional  circumstances”.  Under  this 
criterion, a region can exceptionally benefit from assistance from the Fund where that 
region has been affected by an extraordinary disaster, mainly a natural one, affecting 
the  major  part  of  its  population,  with  serious  and  lasting  repercussions  on  living 
conditions and the economic stability of the region. 

The application relates to five counties (Maramures, Suceava, Botosani, Iasi, Neamt) 
in the north-eastern part of Romania. The affected region is a contiguous and coherent 
area  with  a  total  population  of  over  3  million  inhabitants.  The  Romanian  authorities 

Council  Regulation  (EC)  No  2012/2002  of  11  November  2002  establishing  the  European  Union 
Solidarity Fund, OJ L 311 of 14.11.2002, p.3. 

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indicated that the major part of the population living in this area has been affected. 241 
municipalities with a total population of 1,6 million inhabitants suffered directly from 
the disaster, with a partial or total destruction of private homes and agricultural crops. 

The  Romanian  authorities  presented  evidence  to  demonstrate  serious  and  lasting 
repercussions  on  living  conditions  and  the  economic  stability  of  the  affected  region. 
Serious  damage  was  reported  to  basic  infrastructures,  agriculture,  forestry,  livestock, 
and  private  homes.  While  the  economy  in  the  affected  region  relies  strongly  on  the 
agricultural  sector,  the  floods  covered  39 214 ha  of  agriculture  land  and  240 ha  of 
forests.  Up  until  2009  no  agricultural  production  is  expected  to  take  place  in  the 
affected  areas.  In  addition,  basic  infrastructures  were  seriously  damaged:  a  total  of 
1 949 km of roads were flooded, 2 000 bridges and about 87,6 km of bank and dams 
were  totally  damaged.  The  roads  affected  by  floods  at  the  state  border  of  Romania 
with  Moldavia  and  Ukraine  have  considerably  affected  the  economic  exchange 
between Romania and the countries situated in the Northern and North-Eastern part of 
Europe. The disaster caused lasting repercussions on living conditions in the affected 
region, with around 14 644 households being destroyed, lasting unavailability of basic 
infrastructure (water/energy), and a seriously damaged transport infrastructure leading 
to a complete isolation of around 100 municipalities. 

The  cost  of  essential  emergency  operations eligible  under  Article  3(2)  of  Regulation 
(EC)  No 2012/2002  has  been  estimated  by 
the  Romanian  authorities  at 
EUR 390,8 million and has been broken down by type of operation. The main bulk of 
the  operation  concerns  the  immediate  restoration  to  working  order  of  transport  and 
water  infrastructures  and  the  immediate  securing  of  preventive  infrastructure  for 
floods protection. The types of operation to be financed from the Fund will be clearly 
defined in the Implementation Agreement. 

The  Romanian  authorities  stated  that  no  funding  from  other  sources  of  Community 
financing was received at the time of application. 

The Romanian authorities also declared that there is no coverage of eligible damage by 
insurance. 

(5) 

(6) 

(7) 

(8) 

For the reasons set out above, therefore, it is proposed that the application made by Romania 
relating  to  the  flooding  in  July  2008  be  accepted  as  a  “extraordinary  regional  disaster”  and 
that the Solidarity Fund should be used. 

2.2. 

Financing 

The total annual budget available for the Solidarity Fund is EUR 1 billion. As solidarity was 
the central justification for the creation of the Fund, the Commission takes the view that aid 
from  the  Fund  should  be  progressive.  That  means  that,  according  to  previous  practice,  the 
portion  of  the  damage  exceeding  the  threshold  (0.6 %  of  the  GNI  or  EUR 3 billion  in  2002 
prices, whichever is the lower amount) should give rise to higher aid intensity than damage up 
to the threshold. The rate applied in the past for defining the allocations for major disasters is 
2,5 % of total direct damage under the threshold for mobilizing the Fund and 6 % above. For 
extraordinary regional disasters the rate is 2,5 % of total direct damage. The methodology for 
calculating Solidarity Fund aid was set out in the 2002-2003 Annual Report on the Solidarity 
Fund and accepted by the Council and the European Parliament. 

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It  is  proposed  to  apply  the  same  percentages  in  this  case  and  to  grant  the  following  aid 
amounts: 

Direct damage 

Threshold 

Amount based 
on 2.5 % 

Amount based on 
6 % 

(EUR) 
Total amount of 
aid proposed 

471 415 101 

566 845 000 

11 785 377 

- 

11 785 377 

Romania 
flooding 

This amount of compensation will leave at least 25 % of the European Union Solidarity Fund 
available  for  allocation  during  the  last  quarter  of  the  year,  as  required  by  Article  4(2)  of 
Regulation (EC) 2012/2002. 

At this early stage in the budget year it is difficult to accurately predict where redeployment 
might  be  possible.  However,  to  avoid  the  need  for  fresh  payment  appropriations,  it  is 
proposed that an amount of EUR 11,8 million would be allocated from budget line 13 03 16 
European Regional Development Fund (ERDF)-Convergence to budget line 13 06 01 to cover 
the  corresponding  needs  related  to  the  mobilisation  of  the  EU  Solidarity  Fund.  The 
implementation of line 13 03 16 will be closely monitored during the budget year. 

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SUMMARY TABLE BY HEADING OF THE FINANCIAL FRAMEWORK 

2009 Financial framework 

Budget 2009 

PDAB 1/2009 

Budget 2009 + PDAB 1/2009 

CA 

PA 

CA 

PA 

CA 

PA 

CA 

PA 

Financial framework 
Heading/subheading 

1. SUSTAINABLE GROWTH 
1a. Competitiveness for growth and 
employment 
1b. Cohesion for growth and 
employment 

Total 
Margin4 

2. PRESERVATION AND 
MANAGEMENT OF NATURAL 
RESOURCES 
Of which market related expenditure and 
direct payments 

Total 
Margin 

3. CITIZENSHIP, FREEDOM, 
SECURITY AND JUSTICE 
3a. Freedom, Security and Justice 
3b. Citizenship 

Total 
Margin5   

11 272 000 000

48 428 000 000

59 700 000 000

46 679 000 000

59 639 000 000

872 000 000
651 000 000
1 523 000 000

4. EU AS A GLOBAL PLAYER6 

7 440 000 000

5. ADMINISTRATION7 

6. COMPENSATION 

Margin 

Margin 

Margin 
TOTAL 

Margin   

7 699 000 000

210 000 000

136 211 000 000

123 858 000 000

11 768 997 000

11 024 385 513

11 768 997 000

11 024 385 513 

48 426 884 669

34 975 134 166

-11 785 377

48 426 884 669

34 963 348 789 

60 195 881 669

45 999 519 679

-11 785 377

60 195 881 669

45 987 734 302 

4 118 331  

4 118 331  

41 131 356 325

41 083 823 325

41 131 356 325

41 083 823 325 

56 121 437 011
3 517 562 989  

52 566 129 680

863 925 000
650 963 000
1 514 888 000

8 112 000  

8 103 930 360
-419 930 360
7 700 730 900
76 269 100
209 112 912
887 088
133 845 980 852
3 187 019 148

617 440 000
678 960 000
1 296 400 000

8 324 169 158

7 700 730 900

209 112 912

116 096 062 329
8 083 937 671

+11 785 377
+11 785 377

+11 785 377
+11 785 377

+11 785 377

0

56 121 437 011
3 517 562 989  

52 566 129 680 

863 925 000
662 748 377
1 526 673 377

8 112 000  

8 103 930 360
-419 930 360
7 700 730 900
76 269 100
209 112 912
887 088
133 857 766 229
3 187 019 148

617 440 000 
690 745 377 
1 308 185 377 

8 324 169 158 

7 700 730 900 

209 112 912 

116 096 062 329 
8 083 937 671 

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5 
6 
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The European Globalisation adjustment Fund (EGF) is not included in the calculation of the margin under Heading 1a. 
The European Union Solidarity Fund (EUSF) amount is entered over and above the relevant headings as foreseen by the IIA of 17 May 2006 (OJ C 139 of 14.6.2006) 
The 2009 margin for heading 4 does not take into account the appropriations related to the Emergency Aid Reserve, or the mobilisation of the Flexibility Instrument. 
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 78 million for the staff 
contributions to the pension scheme. 

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