Draft amending budget n° 3 to the general budget 2010 statement of expenditure by section Section III - Commission
Date: 2010-04-08
Institutions: Directorate-General for Budget, European Commission
Subjects: EU financing, amending budget, cooperation policy, developing countries, development aid, draft budget (EU), general budget (EU)

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EUROPEAN COMMISSION 

Brussels, 8.4.2010 
COM(2010)149 final 

DRAFT AMENDING BUDGET N° 3 
TO THE GENERAL BUDGET 2010 

STATEMENT OF EXPENDITURE BY SECTION 
Section III - Commission 

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DRAFT AMENDING BUDGET N° 3 
TO THE GENERAL BUDGET 2010 

STATEMENT OF EXPENDITURE BY SECTION 
Section III - Commission 

Having regard to: 

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the Treaty on the Functioning of the European Union, and in particular Article 314 
thereof,  in  conjunction  with  the  Treaty  establishing  the  European  Atomic  Energy 
Community, and in particular Article 106a 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, 
and in particular Article 37 thereof, 

the  general  budget  of  the  European  Union  for  the  financial  year  2010  adopted  on 
17 December 20092, 

the  draft  amending  budgets  No  1/20103  and  2/20104,  both  adopted  on 
19 March 2010, 

the  amending  Regulation  (EC)  1905/20065  of  the  European  Parliament  and  of  the 
Council  of  18  December  2006  establishing  a  financing  instrument  for  development 
cooperation  

The  European  Commission  hereby  presents  to  the  budgetary  authority  the  Draft  Amending 
Budget No 3 to the 2010 budget. 

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OJ L 248, 16.9.2002, p. 1. 
OJ L 64, 12.3.2010. 
COM(2010) 107 
COM(2010) 108 
OJ L 378, 27.12.2006, p. 41. 

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TABLE OF CONTENTS 

1. 

2. 

2.1 

2.2 

3. 

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

Banana Accompanying Measures ................................................................................ 4 

Motivations for redeployment...................................................................................... 5 

Mobilisation of the Flexibility Instrument ................................................................... 9 

Summary table by heading of the Financial Framework ........................................... 10 

CHANGES TO THE STATEMENT OF EXPENDITURE BY SECTION 

The  changes  to  the  statement  of  expenditure  by  section  are  available  on  EUR-Lex  
(http://eur-lex.europa.eu/budget/www/index-en.htm).  An  English  version  of  the  changes  to 
this statement by section is attached for information as a budgetary annex. 

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1. 

INTRODUCTION 

Draft Amending Budget No 3/2010 covers appropriations related to the establishment of the 
financing of the Banana Accompanying Measures (BAM) in favour of the main ACP banana-
supplying  countries  affected  by  the  Most  Favoured  Nation  (MFN)  liberalisation  in  the 
framework  of  the  World  Trade  Organisation  (WTO),  following  the  proposal  of  amending 
Regulation (EC) No 1905/2006. 

These measures would last for four years (2010-2013) and have a budget of EUR 190 million. 

In  2010,  EUR 75 million  will  be  allocated  to  the  BAM  under  budget  Article  21  06  07 —
 Bananas Accompanying  Measures,  created during the 2010  budget procedure. This amount 
will  be  entered  into  the  reserve  pending  the  adoption  of  the  amending  Regulation  (EC)  No 
1905/20066, to be financed as follows: EUR 55,8 million in commitment appropriations stem 
from redeployment  of appropriations  under Heading  4,  EUR 0,9 million  from  the  margin  of 
Heading  4  and  the  remaining  EUR 18,3 million  through  the  mobilisation  of  the  Flexibility 
Instrument in 2010. 

The  net  financial  impact  of  this  amending  budget  is  EUR 19,2 million  in  additional 
commitment appropriations, with no new request for payment appropriations.  

2. 

BANANA ACCOMPANYING MEASURES 

The European Union is committed to helping ACP countries adapt to the effects of changes in 
its  import  regime.  The  integration  of  all  developing  countries  into  the  multilateral  trading 
system  and  the  global  economy  is  a  key  EU  development  objective.  The  European 
Commission  therefore  proposes  to  support  the  main  ACP  banana-exporting  countries  to 
address  the  challenges  they  will  face  by  establishing  Banana  Accompanying  Measures 
(BAM).  

The Banana Accompanying Measures are intended to support the adjustment of ACP bananas 
supplier  countries  affected  by  the  Most  Favoured  Nation  (MFN)  liberalisation  in  the 
framework of the WTO.  

This programme should aim:  

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to  support  the  adaptation  and/or  restructuring  of  areas  dependent  upon  banana 
exports through budget support or specific interventions, 

to  provide  for  social  resilience  policies,  economic  diversification  or  investments  in 
competitiveness improvement, where this is a viable strategy, taking into account the 
results  of  and  experiences  gained  through  the  Special  System  and  the  Special 
Framework of Assistance to traditional ACP suppliers of bananas. 

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COM(2010) 102 

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2.1 

Motivations for redeployment 

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07  02  04 — Preparatory  action  –  Environmental  monitoring  of  the  Black  Sea 
Basin and a common European framework programme for development of the 
Black Sea region 

This preparatory action continues the pilot project - environmental monitoring of the 
Black Sea Basin and a Common European framework programme for development 
of the Black Sea region created in 2008, with similar objectives. 

Under 2008 and 2009 budget, 2 projects implemented by the Black Sea Commission 
were  supported,  for  EUR 1 million  both  in  2008  and  2009.  The  Black  Sea 
Commission  is  the  sole  organisation  that  for  its  competence  and  structure  might 
guarantee efficient dialogue on pollution among the riparian countries. 

The projects supported in 2008-2009 aim at: 

•  strengthening  the  institutional  cooperation  in  view  of  building  up  the  consensus 
for  addressing  oil  pollution  problems  and  at  preparing  the  implementation  of  a 
monitoring and information platform on oil pollution.  

•  the  development  of  the  information  and  monitoring  capabilities  necessary  to 

enable riparian countries to better address the pollution provoked by oil. 

The  results  of  these  two  projects  will  be  known  by  the  end  of  2011.  As  already 
expressed  in  the  letter  addressed  to  the  Parliament  on  the  "executability"  of 
amendments voted in first reading, the Commission considers that it is advisable to 
wait  for  the  results  of  the  abovementioned  projects  before  launching  new  activities 
on oil pollution. 

Whilst  the  Commission  does  see  an  opportunity  for  further  work  on  the  issue  of 
Environmental  monitoring  of  the  Black  Sea  Basin  under  the  Preparatory  Action,  it 
considers  that  the  amount  of  appropriations  voted  under  the  2010  Budget 
(EUR 2 million) cannot be fully used.  

Taking  into  account  the  need  to  build  on  existing  projects  and  results,  to  avoid 
overlaps  with  ongoing  or  already  planned  relevant  activities  and  to  consider  the 
absorption  capacity  of  possible  implementing  organisations  in  the  region,  the 
Commission  estimates  that  possible  activities  for  2010  would  not  require  financial 
resources exceeding EUR 0,5 million. 

The  Commission  proposes  therefore  to  redeploy  an  amount  of  EUR 1,5 million  in 
commitment appropriations. 

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19  06  08 — Emergency  response  to  the  financial  and  economic  crisis  in 
developing countries 

The Community budget is not equipped for addressing directly the consequences of 
the  financial  and  economic  crisis  in  around  50  of  the  Development  Co-operation 
Instrument  (DCI)  countries  and  cannot  be  a  substitute  to  international  financial 
institutions (IFIs) macroeconomic and sectoral role and mandate. 

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With a limited amount, the purpose of this preparatory action should be rather, in line 
with the European Parliament's objective, to assess the consequences of the financial 
and economic crisis in the developing countries. 

The  Commission  has  proposed  to  start  implementing  these  actions  in  2010  by 
launching  a  study  on  the  impact  of  the  crisis  in  these  developing  countries.  It  is 
estimated  that  an  amount  of  EUR 0,5 million  would  be  appropriate  to  carry  out  a 
study.  The  Commission  proposes 
redeploy  an  amount  of 
EUR 2,5 million in commitment appropriations. 

therefore 

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19 09 01 — Cooperation with developing countries in Latin America 

Following  re-assessment  of  already  planned  actions,  the  Commission  proposes  to 
redeploy an amount of EUR 1 million. 

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19 10 01 01 — Cooperation with developing countries in Asia 

Following  re-assessment  of  already  planned  actions,  the  Commission  proposes  to 
redeploy an amount of EUR 2 million. 

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21 02 01 — Food security 

Following  re-assessment  of  already  planned  actions  the  Commission  proposes  to 
redeploy an amount of EUR 1 million. 

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21  02  03 — Facility  for  rapid  response  to  soaring  food  prices  in  developing 
countries 

An  amount  of  EUR 17,4 million  was  frontloaded  in  2009  in  order  to  cover  urgent 
needs  in  Ghana.  As  already  announced  in  the  transfer  (DEC  42/2009)  the 
Commission  intended  to  propose  a  transfer  in  2010  back  to  another  budget  line  in 
order  to  respect  the  total  envelope  of  the  Food  Facility  of  EUR 1 billion  over  the 
period 2008-2010.  

The  Commission  proposes  thus  to  redeploy  an  amount  of  EUR 17,4 million  in 
commitment appropriations. 

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21 05 01 01 — Health 

Following  re-assessment  of  already  planned  actions  the  Commission  proposes  to 
redeploy an amount of EUR 1 million. 

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21  05  01  06 — Preparatory  action  —  Pharmaceutical-related  transfer  of 
technology in favour of developing countries 

The  objective  of  this  preparatory  action  is  to  support  the  improvement  of 
pharmaceutical  research,  development,  and  production  capacity  in  developing 
countries  in  order  to  increase  access,  especially  of  poor  and  least  developed 
countries, to health products of the poverty related, tropical and neglected, as well as 
non-communicable diseases. 

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Under  the  first  year  of  this  preparatory  action  -  2008  budget  -  a  contribution 
agreement  was  signed  with  the  World  Health  Organisation  (WHO)  in  December 
2008 for the implementation of a large consultation of stakeholders. The purpose of 
the  study  is  to  identify  the  main  challenges  and  obstacles  of  local  pharmaceutical 
production  and  related  transfer  of  technology  to  developing  countries  and  provide 
recommendations  and  guidance  for  further  action  in  this  field.  The  study  was 
launched in January 2009 and will run for 24 months. 

Part  of  the  appropriations  under  the  second  year  of  the  preparatory  action  -  2009 
budget  -  was  used  to  extend  this  study  to  vaccines  and  diagnostics  through  an 
amendment  to  the  initial  Contribution  Agreement  with  WHO  (EUR 0,5 million). 
Further  action  will  be  identified  jointly  with  WHO  and  the  United  Nations 
Conference on Trade and Development (UNCTAD) as the first partial results of the 
study  become  available  as  from  March 2010.  This  second  phase  (EUR 4,5 million) 
will lay the groundwork for implementing the recommendations of the study and set 
the  framework  for  concrete  capacity-building  measures  according  to  the  needs  and 
priorities  identified.  It  is  expected  to  be  implemented  through  a  Contribution 
Agreement with the most appropriate UN agency. 

The second phase of this action has been designed in a flexible way, in order to start 
developing capacity-building plans in the area of human resources and accommodate 
the  first  outcomes  of  the  study  as  they  become  available.  Considering  that  these 
activities are already covered by the budget allocated in 2009, support to other areas 
should build on the recommendations of the study. It would therefore be premature 
and very difficult to identify additional activities before 2011. 

The  study  financed  out  of  the  2008  budget  has  started  only  in  2009.  It  aims  to 
identify priorities and challenges with regard to local pharmaceutical production and 
related  transfer  of  technology  and  will  provide  recommendations  for  further  EC 
action in this field. As the final results will only be available end 2010, it would be 
premature to identify new actions without taking these results into account. 

The  Commission  proposes  therefore  to  redeploy  an  amount  of  EUR 3,3 million  in 
commitment appropriations. 

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21 06 03 — Adjustment support for sugar protocol countries 

It  is  not  possible  to  commit  the  total  indicative  allocation  for  Fiji  in  view  of  the 
political  circumstances  (Cotonou  Agreement  Art.  96  and  DCI  Art.  37). 
Consequently,  and  since  the  funds  cannot  be  used  as  initially  planned,  the 
Commission proposes to redeploy EUR 24,3 million from the sugar budget line.  

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21 07 04 — Commodities Agreements 

The International Tropical Timber Agreement, negotiated in 2006, was supposed to 
enter in force in 2009 or at least in 2010. However, Brazil, one of the world's biggest 
tropical timber producers, has not yet ratified the agreement. The agreement will thus 
enter  in  force  later  than  initially  planned  meaning  that  the  membership  fee  will  be 
lower than expected.  

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'The  Commission  proposes  therefore  to  redeploy  an  amount  of  EUR 1,8 million  in 
commitment appropriations.  

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2.2 

Mobilisation of the Flexibility Instrument 

Point  27  of  the  Interinstitutional  Agreement  of  17  May  20067  allows  for  the 
mobilisation of the Flexibility Instrument to allow the financing of clearly identified 
expenditure  which  could  not  be  financed  within  the  limits  of  the  ceilings  available 
for one or more headings of the multiannual financial framework. 

In  accordance  with  point  27  of  the  Interinsitutional  Agreement,  and  after  having 
examined all possibilities for re-allocating appropriations under heading 4, as set out 
in section 2.1 above, the Commission proposes to mobilise the Flexibility Instrument 
for the financing of the Banana Accompanying Measures (BAM), for an amount of 
EUR 18,3 million beyond the ceiling of heading 4.  

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OJ C 139, 14.06.2006, p. 1 

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3. 

SUMMARY TABLE BY HEADING OF THE FINANCIAL FRAMEWORK 

2010 Financial framework 

CA 

PA 

Budget 2010  
(including DAB 1 to 2/2010) 
CA 

PA 

DAB 3/2010 

CA 

PA 

Budget 2010 
(including DAB 1 to 3/2010) 

CA 

PA 

Financial framework 
Heading/subheading 

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

Total 
Margin8 

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 
Margin9   

14 167 000 000

49 388 000 000

63 555 000 000

47 146 000 000

59 955 000 000

1 025 000 000
668 000 000
1 693 000 000

4. EU AS A GLOBAL PLAYER10 

7 893 000 000

5. ADMINISTRATION11 

Margin 

Margin 
TOTAL 

Margin   

7 882 000 000

140 978 000 000

134 289 000 000

14 861 853 253

11 342 270 803

49 387 592 092

36 384 885 000

64 249 445 345

-194 445 345  

47 727 155 803

14 861 853 253

11 342 270 803 

49 387 592 092

36 384 885 000 

64 249 445 345

47 727 155 803 

-194 445 345  

43 819 801 768

43 701 207 586

43 819 801 768

43 701 207 586 

59 498 833 302

456 166 698  

58 135 640 809

1 006 487 370
668 000 000
1 674 487 370

18 512 630  

8 141 006 470
875 530
7 908 478 423
53 016 577
141 472 755 910
529 126 912

738 570 370
659 387 500
1 397 957 870

7 787 695 183

19 175 530

7 908 478 423

122 956 928 088
11 660 953 912

19 175 530

59 498 833 302

58 135 640 809 

456 166 698  

1 006 487 370
668 000 000
1 674 487 370

18 512 630  

8 160 182 000
-18 300 000
7 908 983 423
53 016 577
141 491 931 440
528 250 560

738 570 370 
659 387 500 
1 397 957 870 

7 787 695 183 

7 908 478 423 

122 956 928 088 
11 660 953 912 

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The  European  Globalisation  adjustment  Fund  (EGF)  is  not  included  in  the  calculation  of  the  margin  under  Heading  1a  (EUR 500 million).  EUR 195 million  above  the  ceiling  is 
financed by the mobilisation of the Flexibility Instrument. 
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  2010  margin  for  heading  4  does  not  take  into  account  the  appropriations  related  to  the  Emergency  Aid  Reserve  (EUR 248,9 million).  EUR 18,3 million  above  the  ceiling  is 
financed by 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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