Amended 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: Financing projects in the field of energy in the context of the European Economic Recovery Plan
Date: 2009-11-30
Institutions: European Commission
Subjects: Internet, commitment of expenditure, common agricultural policy, energy policy, financial management, general budget (EU), interinstitutional agreement, reflation, rural region

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 30.11.2009 
COM(2009)662 final 

Amended 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: 
Financing projects in the field of energy in the context of the European Economic 
Recovery Plan  

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EXPLANATORY MEMORANDUM 

1. 

INTRODUCTION 

At  the  trilogue  meeting  of  2  April  2009,  the  European  Parliament,  the  Council  and  the 
Commission agreed on the financing, in the framework of the European Economic Recovery 
Plan (EERP)1, of projects in the field of energy and broadband internet in rural areas as well 
as activities related to 'new challenges' identified in the Common Agricultural Policy's Health 
Check. 

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

–  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 Policy's Health Check.  

Based  on  that  agreement  and  the  amended  Commission  proposal  of  8  April  20092,  the 
European Parliament and the Council adopted a Decision3 on 6 May 2009 by which the 2007-
2013  financial  framework  was  revised.  The  2009  ceiling  for  commitment  appropriations 
under heading 1A was increased by EUR 2 000 million for financing energy projects to aid 
economic  recovery.  This  increase  was  fully  offset  by  lowering  the  ceiling  for  2009  for 
commitment appropriations under Heading 2 by the same amount. The ceilings for payment 
appropriations for the years 2009-2013 was modified accordingly. In parallel to that Decision, 
EUR 600 million were made available within the 2009 budget for broadband internet in rural 
areas as well as activities related to 'new challenges'. 

According to the agreement of 2 April 2009, the financing of the remaining amount (EUR 1 
980 million for energy and EUR 420 million for developing broadband internet in rural areas 
and  strengthening  operations  related  to  the  "new  challenges"  defined  in  the  context  of  the 
CAP Health Check) is to "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 completed, if needed, at the latest at the conciliation of the 2011 budgetary 
procedure".  

On  27  October  2009  the  Commission  made  a  proposal  for  'compensating'  the  remaining 
amount based on the above agreement4. The present amended proposal for a Decision of the 
European Parliament and of the Council takes into account the final execution data for EAGF 
measures under Heading 2, which were not available when the Commission made its initial 
proposal, as well as the results of the budgetary conciliation meeting of 18 November 2009.  

1 
2 
3 
4 

COM(2008) 859 final/2. 
COM(2009) 171/final 
OJ L 132, 29.5.2009, p. 8.  
COM(2009) 600.  

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Consequently, it proposes to revise the financial framework so as to increase the 2010 ceiling 
for  commitment  appropriations  under  Heading  1A  by  an  amount  of  EUR  1  779  million.  In 
addition,  EUR  120  million  will  be  made  available  by  mobilising  the  Flexibility  Instrument 
under  Point  27  of  the  Interinstitutional  Agreement  of  17  May  2006  on  budgetary  discipline 
and sound financial management (IIA), and EUR 81 million by using the unallocated margin 
left under the 2010 ceiling for commitment appropriations under Heading 1A. This allows for 
providing  the  full  remaining  amount  of  EUR  1  980  million  for  energy  projects  under  the 
EERP  as  agreed  between  the  three  institutions.  In  parallel,  EUR  420  million  will  be  made 
available  within  the  2010  budget  for  broadband  internet  in  rural  areas  as  well  as  activities 
related to 'new challenges'.  

2. 

SCOPE FOR REALLOCATING EXPENDITURE UNDER THE CEILING OF HEADING 1A 

The  margin  of  EUR  3  million  left  under  the  2009  ceiling  for  commitment  appropriations 
under heading 1A will be made available for financing the EERP. In accordance with Point 23 
of  the  IIA  which  provides  for  examining  the  scope  for  reallocating  expenditure  before 
revising  the  ceiling,  the  three  institutions  have  agreed  at  the  above  mentioned  conciliation 
meeting that EUR 81 million of the 2010 unallocated margin in the preliminary draft budget 
of the Commission will be used for the financing of the energy projects under the EERP. This 
is in line with the Declaration adopted on 2 April 2009 which provides that "the compensation 
mechanism will be without prejudice to the financial envelopes of the co-decided programmes 
and the annual budgetary procedure". 

3. 

TRANSFERS FROM ONE HEADING TO ANOTHER  

In accordance with Point 23, second paragraph, of the IIA and in line with the 2 April 2009 
agreement, the institutions have agreed at the budgetary conciliation meeting of 19 November 
2009 to 'compensate' the raising of the ceiling for commitment appropriations under Heading 
1A in the following way: 

Commitment appropriations: Transfers from Heading 1B 

A  margin  of  EUR  1  million  is  left  under  the  2009  ceiling  and  of  EUR  6  million  under  the 
2010  ceiling  for  commitment  appropriations  under  Heading  1B  due  to  unused  technical 
assistance.  It  was  agreed  to  use  these  amounts  for  financing  energy  projects  under  the 
Recovery Plan. The Commission confirms that the margin for commitment appropriations in 
2010 under sub-heading 1b has its exclusive origin in the reassessment of the needs for the 
technical  assistance  at  the  initiative  of  and/or  on  behalf  of  the  Commission  as  specified  in 
article  45  of  Council  Regulation  1083/2006.  As  a  consequence  it  has  no  impact  on  the 
programming or on the commitments of the operational programmes.  

Commitment appropriations: Transfers from Heading 2 

The  final  amount  left  under  the  2009  expenditure  ceiling  for  commitment  appropriations 
under Heading 2 is EUR 1 036 million. This includes EUR 34 million resulting from under-
execution  of  fisheries  programmes  which  have  been  inserted  in  Amending  Budget  No 
10/2009.  

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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  was  agreed  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.  

The initial margin under the 2010 expenditure ceiling for commitment appropriations  under 
Heading 2 amounts to EUR 1 083 million after Council second reading of the 2010 budget.  

It was agreed 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 158 million, which can be made available for energy projects under Heading 

1A. 

This  leaves  a  margin  of  EUR  505  million  available  for  agriculture  under  the  expenditure 
ceiling in 2010. 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 3A 

A  margin  of  EUR  5  million  is  left  under  the  ceiling  for  commitment  appropriations  under 
Heading 3A in 2009. Given that the budgetary year is almost completed and that no other use 
was  foreseen  for  this  remaining  amount,  it  was  agreed  that  it  will  also  contribute  to  the 
financing of the energy projects under the EERP.  

Commitment appropriations: Transfers from Heading 5 

The  margin  under  the  expenditure  ceilings  of  Heading  5  (Administration)  amounts  to  EUR 
174  million  in  2009  (including  an  increase  of  the  margin  by  EUR  98  million  which  results 
from  under-execution  in  the  budgets  of  the  Commission,  the  Council,  the  Economic  and 
Social  Committee  and  the  Committee  of  Regions  and  was  made  available  by  Amending 
Budget No 10/2009). For 2010, it was agreed to keep a margin of EUR 72 million after taking 
into  consideration  the  amendments  of  the  European  Parliament's  first reading  and  the 
proposed Amending Letter 3/2010. Part of this margin may be necessary to cover additional 
needs  related  to  the  entry  into  force  of  the  Lisbon  Treaty.  Taking  that  into  account,  it  is 
proposed to make EUR 300 million (EUR 174 million from the 2009 margin and EUR 126 
million  from  the  2010  margin)  available  for  the  financing  of  the  energy  projects  under  the 
EERP. 

4. 

PAYMENT APPROPRIATIONS 

Point 23, fourth paragraph, of the IIA provides that any revision must maintain an appropriate 
relationship  between  commitments  and  payments.  Hence,  the  annual  ceilings  for  payment 

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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.  

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5. 

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. Cohesion for Growth and 
Employment

2. Preservation and Management 
of Natural Resources

-3

-1

1.779

-6

-1.306

-158

3a. Freedom, security and justice

-5

3b. Citizenship

4. EU as a global player

5. Administration

-174

-126

6. Compensations

Total
change
appropriations

Total
appropriations

change

in commitment

0

in

payment

0

0

-1.489

1.489

0

0

0

-1.489

134

381

504

470

1.776

-7

-1.464

-5

0

0

-300

0

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

61.696

13.269

48.427

56.333

46.679

1.518

867

651

7.440

7.525

210

2010

63.555

14.167

49.388

59.955

47.146

1.693

1.025

668

7.893

7.882

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
436.770

89.363

347.407

413.061

330.085

12.216

7.549

4.667

55.935

55.925

862

TOTAL COMMITMENT APPROPRIATIONS

124.457

132.797

134.722

140.978

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

122.369

133.639

133.833

140.704

142.878

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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Amended 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 - 
Financing projects in the field of energy in the context of the European Economic 
Recovery Plan  

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 
management5,  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 18 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")6.  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 1 779 million in current prices. 

The increase of the ceiling for sub-Heading 1 A for the year 2010 will be fully offset 
by decreasing the ceilings for commitment appropriations under Headings 1A, 1B, 2, 
3A  and  5  for  the  year  2009  as  well  as  the  ceilings  for  commitment  appropriations 
under Heading 1B, 2 and 5 for 2010.  

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. 

5 
6 

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. 

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(4) 

Annex  I  of  the  Interinstitutional  Agreement  on  budgetary  discipline  and  sound 
financial management should therefore be amended accordingly7, 

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 

For the Council 
Algirdas SEMETA 
Member of the Commission 

7 

For that purpose, the figures resulting from the above agreement are converted into 2004 prices. 

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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

55.879

12.018

43.861

51.023

42.279

1.375

785

590

6.739

6.816

190

2010

56.435

12.580

43.855

53.238

41.864

1.503

910

593

7.009

6.999

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
386.963

78.939

308.024

366.621

293.105

10.765

6.625

4.140

49.463

49.531

800

TOTAL COMMITMENT APPROPRIATIONS

117.277

122.683

122.022

125.184

124.167

125.643

127.167

864.143

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

110.833

118.668

116.510

120.090

119.554

820.602

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%

0,98%

0,26%

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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