Communication from the Commission to the European Parliament and the Council concerning the revision of the multiannual financial framework (2007-2013) - Financing projects in the field of energy in the context of the European Economic Recovery Plan (second revision)
Date: 2009-10-27
Institutions: European Commission
Subjects: Community budget, Internet, energy grid, energy policy, financial management, reflation, reform of the CAP, rural development, trans-European network

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.10.2009 
COM(2009)600 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 

concerning the revision of the multiannual financial framework (2007-2013) 

Financing projects in the field of energy in the context of the European Economic 
Recovery Plan (second revision) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and 
sound financial management as regards the multiannual financial framework 

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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 

concerning the revision of the multiannual financial framework (2007-2013) 

Financing projects in the field of energy in the context of the European Economic 
Recovery Plan (second revision) 

Introduction 

On the basis of the Commission proposal of 10 December 2008 concerning the revision of the 
financial  framework  for  financing  trans-European  energy  interconnections  and  broadband 
infrastructure projects in the context of the European Economic Recovery Plan1, the European 
Parliament, the Council and the Commission have agreed, at the budgetary trilogue meeting 
of 2 April 2009, to finance the package as follows:  

(1) 

The  package,  which  aims  at  providing  additional  stimulus  to  the  economy  and 
improving energy security, amounts to EUR 5 000 million in current prices: 

(a) 

(b) 

EUR 3 980 million will be made available for the financing of energy projects 
under Heading 1A of the financial framework: EUR 2 000 million in 2009 and 
EUR 1 980 million in 2010.  

In  addition,  EUR  1  020  million  will  be  made  available  within  Heading  2  for 
developing  broadband  internet  in  rural  areas  and  strengthening  operations 
related  to  the  'new  challenges'  defined  in  the  context  of  the  Common 
Agricultural Policies' Health Check.  

(2) 

The  financing  of  the  total  amount  of  EUR  5  000  million  will  be  secured  as  soon  as 
possible: 

(a) 

The 2009 ceiling of Heading 1 A will be increased by an amount of EUR 2 000 
million, which will be offset by a decrease of the 2009 ceiling of Heading 2 by 
the  same  amount  in  accordance  with  points  21  to  23  of  the  Interinstitutional 
Agreement  of  17  May  2006  on  budgetary  discipline  and  sound  financial 
management  (IIA)2.  In  addition,  EUR  600  million  will  be  added  to  rural 
development  in  the  2009  budget  for  financing  broadband  internet  and 
strengthening  operations  related  to  the  "new  challenges".  The  multiannual 
framework  will  be  revised  and  at  the  same  time  the  2009  budget  amended 
accordingly  on  the  basis  of  the  present  amended  Commission  proposal  and  a 
Preliminary Draft Amending Budget to the 2009 budget. 

(b) 

The  financing  of  the  remaining  amount  (EUR  2  400  million)  will  be  secured 
through  a  compensation  mechanism  at  the conciliation of the  2010 budgetary 
procedure by using all budgetary means foreseen in its legal framework, to be 

1 
2 

COM(2008) 859 final/2. 
OJ C 139, 14.6.2006, p. 1. 

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completed,  if  needed,  at  the  latest  at  the  conciliation  of  the  2011  budgetary 
procedure:  

– 

– 

– 

The  European  Parliament,  the  Council  and  the  Commission  will 
examine  all  available  sources  that  could  provide  for  the  compensation 
of funds.  

Before the use of the available amount within Heading 2 is considered, 
EUR 420 million will be committed for developing broadband internet 
in  rural  areas  and  strengthening  operations  related  to  the  "new 
challenges" defined in the context of the assessment of the 2003 reform 
of the Common Agricultural Policy ("Health Check") in 2010. 

In  order  to  compensate  for  the  amount  of  EUR  1  980  million,  the 
remaining  margins  under  the  2009  ceilings  and  the  2010  available 
margins (with due respect to point 13 of the IIA) and, if necessary, all 
other financial availabilities will be used, including the 2011 available 
margins. The compensation mechanism will be without prejudice to the 
financial  envelopes  of  the  co-decided  programmes  and  the  annual 
budgetary procedure. 

(3) 

The overall ceiling of the 2007-2013 financial framework will not be exceeded. 

By  Decision  of  the  European  Parliament  and  of  the  Council  of  6  May  2009  the  financial 
framework was revised on 6 May 2009 so as to increase the 2009 ceiling of Heading 1A by an 
amount of EUR 2 000 million3.  

The  present  communication  includes  a  proposal  for  a  new  Decision  of  the  European 
Parliament  and  of  the  Council  to  revise  the  financial  framework,  so  as  to  increase  the  2010 
ceiling  for  commitment  appropriations  under  Heading  1A  by  an  amount  of  EUR  1  587 
million. This would leave a provisional gap of EUR 393 million to be filled for covering the 
full  amount  foreseen  for  projects  in  the  field  of  energy.  In  accordance  with  the  above 
agreement,  this  gap  shall  be  filled  at  the  latest  at  the  conciliation  of  the  2011  budgetary 
procedure.  

The  final  size  of  the  gap  will  be  assessed  as  soon  as  the  final  execution  data  for  EAGF 
measures  under  Heading  2  become  available  in  early  November  2009.  Any  new  market 
developments  which  may  influence  the  2010  budget  will  also  be  assessed  at  this  time.  The 
Commission  undertakes  to  examine  all  financial  availabilities  with  a  view  to  filling  the 
remaining gap at the November 2009 budget conciliation.  

Use of margins and redeployment within Heading 1A 

Point 13 of the IIA provides that the institutions are required to ensure that sufficient margins 
are  left  available  beneath  the  ceilings.  No  margin  is  left  under  the  2009  ceiling  for 
commitment  appropriations  under  heading  1A.  The  margins  available  under  the  ceilings  of 
Heading 1A amount to EUR 43 million for 2010, including Amending Letter No 2 to fund the 
decommissioning of the Kozloduy nuclear power plant over the period 2011 to 2013, and to 

3 

OJ L 132, 29.5.2009, p. 8.  

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EUR  37  million  for  2011,  taking  into  the  recent  Commission  proposals  for  the  Global 
Monitoring  for  Environment  and  Security  (GMES),  Kozloduy,  and  the  new  authorities  for 
financial  supervision.  The  Commission,  therefore,  considers  that  these  margins  cannot  be 
used  to  contribute  to  the  financing  of  the  concerned  activities  foreseen  in  the  European 
Economic Recovery Plan.  

Under  the  Declaration  adopted  on  2  April  2009  the  three  institutions  have  agreed  that  "the 
compensation  mechanism  will  be  without  prejudice  to  the  financial  envelopes  of  the  co-
decided programmes and the annual budgetary procedure". The Commission sees no further 
availabilities in terms of redeployments within Heading 1A.  

Commitment appropriations: Transfers from Heading 2 

The  current  margin  left  under  the  2009  expenditure  ceiling  for  commitment  appropriations 
under Heading 2 amounts to EUR 901 million. This includes EUR 34 million resulting from 
under-execution of fisheries programmes which have been inserted in Amending Budget No 
10/2009.  

In addition, appropriations amounting to EUR 250 million for rural development and EUR 20 
million  for  climate  change  were  entered  into  the  2009  budget,  but  cannot  be  used  because 
there is no appropriate legal basis.  

Given  that  the  agricultural  year  is  now  closed,  it  is  proposed  to  make  the  remaining  2009 
margin and the unused appropriations under Heading 2 available to the energy projects of the 
European Economic Recovery Plan to be financed under Heading 1A.  

Because of the critical situation in the dairy markets, the actual availability of the unallocated 
margin under the 2010 expenditure ceiling for commitment appropriations under Heading 2 is 
lower than originally expected and amounts to EUR 844 million.  

The Commission proposes to use this margin for providing, 

–  under Heading 2, the EUR 420 million required under the European Economic Recovery 
Plan for developing broadband internet in rural areas and strengthening operations related 
to the "new challenges" defined in the context of Health Check; 

–  a further EUR 124 million, which can be made available for energy projects under Heading 

1A. 

This  leaves  a  margin  of  EUR  300  million  available  for  agriculture  under  the  expenditure 
ceiling  in  2010,  which  corresponds  to  the  margin  necessary  to  avoid  application  of  the 
financial  discipline  mechanism.  In  any  case,  the  Commission  has  undertaken  to  take  all 
appropriate  measures  to  ensure  that  decisions  taken  on  CAP  expenditure  and  its  financing, 
including the agreement on the Health Check, are respected. 

Commitment appropriations: Transfers from Heading 5 

The  margins  under  the  expenditure  ceilings  of  Heading  5  (Administration)  amount  to  EUR 
131 million in 2009 (including an increase of the margin of EUR 55  million  resulting  from 
under-execution and made available by Amending Budget No 10/2009) and EUR 230 million 
in  2010.  Part  of  the  latter  margin  may  be  necessary  to  cover  additional  needs  related  to  the 

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entry  into  force  of  the  Lisbon  Treaty.  Taking  that  into  account,  a  maximum  of  EUR  281 
million (EUR 131 million from the 2009 margin and EUR 150 million from the 2010 margin) 
can be made available. 

Commitment appropriations: Transfers from Heading 1b 

Finally,  a  margin  of  EUR  11  million  is  left  under  the  2010  ceiling  for  commitment 
appropriations under Heading 1B because of lower technical assistance requirements, which 
can also be used. 

Payment appropriations 

In terms of payments appropriations, point 23, fourth paragraph, of the IIA requires that any 
revision  must  maintain  an  appropriate  relationship  between  commitments  and  payments. 
Hence, the annual ceilings for payment appropriations need to be modified on the basis of the 
payment  profiles  foreseen  for  the  additional  commitments  under  Heading  1A  and  the 
reduction  of  payments  corresponding  to  the  reduction  of  commitment  appropriations  for 
Headings 1b, 2 and 5 in 2009 and 2010.  

Summary table and conclusion  

The  below  table  summarises  the  proposed  changes  to  the  ceilings  for  commitment  and 
payment appropriations in the financial framework. Amounts are expressed in current prices: 

2007

2008

2009

2010

2011

2012

2013

2007-2013

Commitment appropriations (EUR 
million)

1a. Competitiveness for Growth 
and Employment

1b. Competitiveness for Growth 
and Employment

2. Preservation and Management 
of Natural Resources

1.587

-11

-1.171

-124

5. Administration

-131

-150

Total
change
appropriations

Total
appropriations

change

in commitment

0

in

payment

0

0

-1.302

1.302

0

0

0

-1.302

93

340

450

419

1.587

-11

-1.295

-281

0

0

Overall,  the  revision  shall  be  neutral  in  terms  of  the  global  ceilings  for  commitment  and 
payment appropriations expressed in current prices.  

The above changes result in the below financial framework table in current prices.  

The formal decision on the revision of the financial framework must refer to the basic table 
agreed in the IIA, which is expressed in constant 2004 prices. The amounts in current values 
are  thus  to  be  converted  into  2004  prices  by  means  of  a  fixed  deflator  of  2%  a  year,  in 
accordance with Point 16 of the IIA. 

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 FINANCIAL FRAMEWORK 2007-2013: SECOND REVISION FOR EUROPEAN ECONOMIC RECOVERY PLAN 

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

61.700

13.272

48.428

56.468

46.679

1.523

872

651

7.440

7.568

210

2010

63.358

13.975

49.383

59.989

47.146

1.693

1.025

668

7.893

7.858

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
436.577

89.174

347.403

413.230

330.085

12.221

7.554

4.667

55.935

55.944

862

TOTAL COMMITMENT APPROPRIATIONS

124.457

132.797

134.909

140.791

142.629

147.210

151.976

974.769

as a percentage of GNI

1,02%

1,08%

1,13%

1,16%

1,13%

1,12%

1,11%

1,11%

TOTAL PAYMENT APPROPRIATIONS

122.190

129.681

122.556

133.598

133.792

140.650

142.827

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%

1,03%

0,21%

1,24%

1,10%

0,14%

1,24%

1,06%

0,18%

1,24%

1,07%

0,17%

1,24%

1,05%

0,19%

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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Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and 
sound financial management as regards the multiannual financial framework 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Interinstitutional  Agreement  between  the  European  Parliament,  the 
Council  and  the  Commission  of  17  May  2006  on  budgetary  discipline  and  sound  financial 
management4,  and  in  particular  to  Points  21,  22,  first  and  second  subparagraphs,  and  23 
thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

At the budgetary conciliation meeting of 19 November 2009 the European Parliament, 
the  Council  and  the  Commission  have  agreed  on  the  modalities  for  providing 
additional financing, in the framework of the European Economic Recovery Plan, to 
projects  in  the  field  of  energy  and  broadband  internet  as  well  as  investments  for 
strengthening operations related to the "new challenges" defined in the context of the 
assessment of the 2003 mid-term reform of the Common Agricultural Policy ("Health 
Check")5.  The  financing  requires  a  revision  of  the  multiannual  financial  framework 
2007-2013  in  accordance  with  Points  21,  22,  and  23  of  the  Interinstitutional 
Agreement, so as to raise the ceiling for the year 2010 for commitment appropriations 
under sub-Heading 1A by an amount of EUR 1 587 million in current prices. 

The increase of the ceiling for sub-Heading 1 A will be fully offset by decreasing the 
ceilings for commitment appropriations under Headings 1b, 2 and 5 for the years 2009 
and 2010 by a total amount of EUR 1 587 million.  

In order to keep an appropriate relationship between commitments and payments, the 
annual  ceilings  for  payment  appropriations  will  be  adjusted.  The  adjustment  will  be 
neutral. 

(4) 

Annex  I  of  the  Interinstitutional  Agreement  on  budgetary  discipline  and  sound 
financial management should therefore be amended accordingly6, 

4 
5 
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OJ C 139, 14.6.2006, p. 1. 
COM(2008) 800, COM(2008) 859, COM(2009) 171, and OJ L 132, 29.5.2009, p. 8. 
For that purpose, the figures resulting from the above agreement are converted into 2004 prices. 

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HAVE DECIDED AS FOLLOWS: 

Sole Article 

Annex  I  to  the  Interinstitutional  Agreement  on  budgetary  discipline  and  sound  financial 
management is replaced by the Annex to this Decision. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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ANNEX  

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

(EUR million - constant 2004 prices)

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

55.883

12.021

43.862

51.145

42.279

1.380

790

590

6.739

6.855

190

2010

56.259

12.409

43.850

53.269

41.864

1.503

910

593

7.009

6.978

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

2013

58.256

12.914

45.342

51.284

40.645

1.988

1.390

598

8.029

7.610

Total
2007-2013
386.791

78.771

308.020

366.774

293.105

10.770

6.630

4.140

49.463

49.549

800

TOTAL COMMITMENT APPROPRIATIONS

117.277

122.683

122.192

125.018

124.167

125.643

127.167

864.147

as a percentage of GNI

1,08%

1,09%

1,06%

1,06%

1,03%

1,02%

1,01%

1,048%

TOTAL PAYMENT APPROPRIATIONS

115.142

119.805

111.003

118.631

116.474

120.043

119.511

820.609

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%

0,96%

0,28%

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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