Communication from the Commission to the European Parliament and the Council - Technical adjustment of the financial framework for 2010 in line with movements in GNI (Point 16 of the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management)
Date: 2009-04-01
Institutions: European Commission
Subjects: adaptation of financial perspectives, budgetary discipline (EU), budgetary procedure, enlargement of the Union, interinstitutional agreement, national income, price fluctuation

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 1.4.2009 
COM(2009) 148 final 

COMMUNICATION FROM THE COMMISSION  
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

Technical adjustment of the financial framework for 2010 
in line with movements in GNI  

(Point 16 of the Interinstitutional Agreement of 17 May 2006 
on budgetary discipline and sound financial management) 

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COMMUNICATION FROM THE COMMISSION  
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

Technical adjustment of the financial framework for 2010 
in line with movements in GNI  

(Point 16 of the Interinstitutional Agreement of 17 May 2006 
on budgetary discipline and sound financial management) 

1. 

INTRODUCTION 

The Interinstitutional Agreement (IIA) of 17 May 2006 on budgetary discipline and 
sound  financial  management  (OJ  C 139/1  of  14/06/2006)  contains  the  financial 
framework  table  for  EU-27  for  the  period  2007-2013,  expressed  in  2004  prices 
(Table 1). 

Point  16  of  the  Interinstitutional  Agreement  states  that  each  year  the  Commission 
will, ahead of the budgetary procedure for year n+1, make a technical adjustment to 
the  financial  framework  in  line  with  movements  in  the  EU's  gross  national  income 
(GNI)  and  prices.  Movements  in  GNI  have  been  updated  with  the  latest  economic 
forecasts available. 

As far as prices are concerned, the IIA (point 16) now foresees a fixed 2 % deflator 
for all expenditure, which was already applied for the technical adjustment for 2007 
(see COM(2006) 327 of 22/06/2006). Thus no modification on prices is made in the 
present adjustment, since expenditure ceilings at current prices for the whole period 
2007-2013 are already available since last year. 

The purpose of this communication is to present to the budgetary authority the result 
of the technical adjustment (EU-27) for 2010. 

2. 

TERMS OF THE ADJUSTMENT OF THE FINANCIAL FRAMEWORK TABLE (TABLES 1-
2) 

Table 1 shows the financial framework for EU-27 as adopted in the IIA (OJ L 6/7 of 
10/01/2008), i.e. in 2004 prices. 

Table 2 shows the financial framework for EU-27 adjusted for 2010 (i.e. in current 
prices,  unchanged  as  compared  to  the  adjustment  for  2007,  see  COM(2006) 327  of 
22/06/2006,  except  that  the  financial  framework  expressed  in  percentage  of  GNI  is 
updated with the latest economic forecasts available). 

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2.1. 

Total figure for GNI 

According  to  the  latest  forecast  available,  the  GNI  for  2010  is  established  at 
EUR 12 153 601 million in current prices for EU-27 (and at EUR 11 891 507 million 
for 2009, EUR 12 336 548 million for 2008 and EUR 12 160 707 million for 2007). 

For subsequent years (2011-2013) the EU-27 GNI has been calculated on the basis of 
internal  Commission  projections  for  the  annual  average  growth  rate  in  real  terms. 
These  projections  are  indicative  and  will  be  updated  annually  on  the  basis  of  the 
latest economic forecasts available. 

2.2.  Main results of the technical adjustment of the Financial Framework for 2010 

(EU-27) 

The  overall  ceiling  on  commitment  appropriations  for  2010  (EUR 139 489 million) 
equals 1.15 % of GNI. 

The  corresponding  overall  ceiling  concerning 
the  payment  appropriations 
(EUR 133 505 million)  equals  1.10 %  of  GNI.  On  the  basis  of  the  latest  economic 
forecasts,  this  leaves  a  margin  beneath  the  1.24 %  own  resources  ceiling  of 
EUR 17 200 million (0.14 % of GNI for EU-27). 

3. 

OTHER ELEMENTS LINKED TO THE TECHNICAL ADJUSTMENT 

3.1. 

Heading 5 (Administration) 

In the case of heading 5, a footnote to the financial framework states that the figures 
for  pensions  included  under  the  ceiling  for  this  heading  are  to  be  calculated  net  of 
staff  contributions  to  the  pension  scheme,  up  to  a  maximum  of  EUR 500  million 
(2004  prices)  for  the  period  2007-2013.  This  provision  should  be  interpreted  as 
imposing a dual limit on the amounts deducted from expenditure on pensions when 
applying the ceiling of the heading: 

– 

– 

This  amount  may  not  exceed  the  contributions  actually  entered  as  budget 
revenue in any one year; 

The accumulated total of deductions for the period 2007-2013 may not exceed 
EUR 500 million at 2004 prices, equivalent to an average of EUR 71.4 million 
(EUR 80.0 million at 2010 prices). 

The  recurrent  nature  of  administrative  expenditure  imposes  that  the  lowest  limit  is 
adopted annually to avoid using a margin at the start of the period which would no 
longer  be  fully  available  afterwards.  For  2010  the  amount  to  be  deducted  is 
EUR 80.0 million at current prices. 

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3.2. 

Expenditure items outside the financial framework 2007-2013 

A  number  of  instruments  are  available  outside  expenditure  ceilings  agreed  in  the 
financial framework 2007-2013. These instruments aim at providing rapid response 
to exceptional or unforeseen events, and provide some flexibility beyond the agreed 
expenditure ceilings within certain limits: 

•  the Emergency Aid reserve, which can be mobilised up to a maximum amount of 
EUR 221 million per year in 2004 prices, or EUR 248.9 million in 2010 at current 
prices (EUR 1 744 million for the whole period in current prices); 

•  the  EU  Solidarity  Fund,  whose  maximum  annual  amount  in  current  prices  is 

EUR 1 billion; 

•  the  Flexibility  Instrument,  with  a  maximum  annual  amount  in  current  prices  of 
EUR 200 million,  plus  the  portion  of  the  unused  annual  amounts  of  the  years 
2005-2009, which may be carried over to year 2010; 

In  addition,  it  will  be  possible  to  mobilise  the  European  Globalisation  Adjustment 
Fund  (EGF)  up  to  a  maximum  of  EUR 500 million  per  year  in  current  prices  by 
drawing  from  any  margin  existing  under  the  global  ceiling  for  commitment 
appropriations  of  the  previous  year,  and/or  from  cancelled  commitments  from  the 
previous  two  years  (excluding  those  related  to  heading 1b).  For  the  year  2010  the 
conditions are met to enter the EUR 500 million provision in the budget. 

4. 

OPERATIONS OUTSIDE THE BUDGET AND OWN RESOURCES 

The  fourth  subparagraph  of  Point 11  of  the  Interinstitutional  Agreement  states  that 
information  relating  to  operations  not  included  in  the  general  budget  and  the 
foreseeable development of the various categories of own resources is to be set out in 
tables, as an indication, and updated annually when the technical adjustment is made 
to the financial framework. 

This  information,  updated  in  line  with  the  latest  estimates  available,  is  set  out  in 
Tables 3.1 to 3.2. It covers the European Development Fund (EDF) and the structure 
of own resources. 

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ANNEXES 

TABLE 1: FINANCIAL FRAMEWORK 2007-2013 

COMMITMENT APPROPRIATIONS

1. Sustainable Growth

1a Competitiveness for Growth and Employment
1b Cohesion for Growth and Employment

2. Preservation and Management of Natural Resources
of which: market related expenditure and direct payments

3. Citizenship, freedom, security and justice

3a Freedom, Security and Justice
3b Citizenship

4. EU as a global player
5. Administration (1)
6. Compensations

2007

50 865

8 404

42 461

51 962

43 120

1 199

600

599

6 199

6 633

419

2008

53 262

9 595

43 667

54 685

42 697

1 258

690

568

6 469

6 818

191

2009

54 071

10 209

43 862

54 017

42 279

1 380

790

590

6 739

6 973

190

2010

54 860

11 000

43 860

53 379

41 864

1 503

910

593

7 009

7 111

2011

55 400

11 306

44 094

52 528

41 453

1 645

1 050

595

7 339

7 255

2012

56 866

12 122

44 744

51 901

41 047

1 797

1 200

597

7 679

7 400

(EUR million - 2004 prices)

2013

58 256

12 914

45 342

51 284

40 645

1 988

1 390

598

8 029

7 610

Total
2007-2013
383 580

75 550

308 030

369 756

293 105

10 770

6 630

4 140

49 463

49 800

800

TOTAL COMMITMENT APPROPRIATIONS

117 277

122 683

123 370

123 862

124 167

125 643

127 167

864 169

as a percentage of GNI

1.08%

1.09%

1.07%

1.05%

1.03%

1.02%

1.01%

1.048%

TOTAL PAYMENT APPROPRIATIONS

115 142

119 805

112 182

118 549

116 178

119 659

119 161

820 676

as a percentage of GNI
Margin available
Own Resources Ceiling as a percentage of GNI

1.06%

0.18%

1.24%

1.06%

0.18%

1.24%

0.97%

0.27%

1.24%

1.00%

0.24%

1.24%

0.97%

0.27%

1.24%

0.97%

0.27%

1.24%

0.95%

0.29%

1.24%

1.00%

0.24%

1.24%

(1) The expenditure on pensions included under the ceiling for this heading is calculated net of the staff contributions to the relevant scheme, within the limit of € 500 million at 
2004 prices for the period 2007-2013.

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TABLE 2: FINANCIAL FRAMEWORK (EU-27) ADJUSTED FOR 2010 

COMMITMENT APPROPRIATIONS

1. Sustainable Growth

1a Competitiveness for Growth and Employment
1b Cohesion for Growth and Employment

2. Preservation and Management of Natural Resources
of which: market related expenditure and direct payments

3. Citizenship, freedom, security and justice

3a Freedom, Security and Justice
3b Citizenship

4. EU as a global player
5. Administration (1)
6. Compensations

2007

53 979

8 918

45 061

55 143

45 759

1 273

637

636

6 578

7 039

445

2008

57 653

10 386

47 267

59 193

46 217

1 362

747

615

7 002

7 380

207

2009

59 700

11 272

48 428

59 639

46 679

1 523

872

651

7 440

7 699

210

2010

61 782

12 388

49 394

60 113

47 146

1 693

1 025

668

7 893

8 008

2011

63 638

12 987

50 651

60 338

47 617

1 889

1 206

683

8 430

8 334

2012

66 628

14 203

52 425

60 810

48 093

2 105

1 406

699

8 997

8 670

(EUR million - current prices)

2013

69 621

15 433

54 188

61 289

48 574

2 376

1 661

715

9 595

9 095

Total
2007-2013
433 001

85 587

347 414

416 525

330 085

12 221

7 554

4 667

55 935

56 225

862

TOTAL COMMITMENT APPROPRIATIONS

124 457

132 797

136 211

139 489

142 629

147 210

151 976

974 769

as a percentage of GNI

1.02%

1.08%

1.15%

1.15%

1.13%

1.12%

1.11%

1.11%

TOTAL PAYMENT APPROPRIATIONS

122 190

129 681

123 858

133 505

133 452

140 200

142 408

925 294

as a percentage of GNI
Margin available
Own Resources Ceiling as a percentage of GNI

1.00%

0.24%

1.24%

1.05%

0.19%

1.24%

1.04%

0.20%

1.24%

1.10%

0.14%

1.24%

1.06%

0.18%

1.24%

1.07%

0.17%

1.24%

1.04%

0.20%

1.24%

1.05%

0.19%

1.24%

(1) The expenditure on pensions included under the ceiling for this heading is calculated net of the staff contributions to the relevant scheme, within the limit of € 500 million at 
2004 prices for the period 2007-2013.

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TABLE 3: INDICATIVE PROGRAMME OF EXPENDITURE NOT ENTERED IN THE GENERAL BUDGET 
AND PROSPECTIVE TREND IN THE VARIOUS OWN RESOURCES 

TABLE 3.1.  EUROPEAN DEVELOPMENT FUND

Commitments (C) and Payments (P)
EUR million - current prices
2001

2000

2002

2003

2004

2005

2006

2007

2008

2009

2010

P
1 640

C
P
C
3 636
2 345
4 007
The series relate to the measures managed by the Commission. Measures managed by the European Investment Bank are not included.
The amounts for 2001 to 2004 have been amended to take account of the impact of the regularisation of certain payments made on the Stabex instrument.

P
2 464

C
3 511

P
2 544

C
2 125

P
1 922

C
3 769

C
2 648

C
3 408

P
1 779

C
1 927

P
2 826

P
2 920

C
4 843

P
3 215

C
3 750

P
3 375

C
3 750

P
3 550

TABLE 3.2. OWN RESOURCES BY CATEGORY

% of total
Traditional own resources (TOR)
VAT
GNP/GNI
2000-2007: outturns (including the retroactive adjustment in 2002 of 15% of the amounts retained in 2001 as TOR collection costs)
2008: Amending Budget 10/2008 & 2009: Preliminary Draft Amending Budget 3/2009
In 2009, Council Decision No 2000/597 was repealed and Council Decision No 2007/436 implemented. The corresponding retroactive effect for 2007 and 2008 was budgeted in 2009. 

2000
2009
17% 18% 12% 13% 13% 14% 15% 15% 15% 17%
40% 39% 29% 26% 15% 16% 17% 18% 17%
7%
43% 43% 59% 61% 72% 70% 69% 67% 67% 77%

2006

2001

2002

2003

2004

2005

2007

2008

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