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, to address additional financing needs of the ITER project
Date: 2010-07-20
Institutions: European Commission
Subjects: Community budget, Internet, energy grid, energy policy, financial management, reflation, reform of the CAP, rural development, trans-European network

EN 

EN 

   EN 

 
EUROPEAN COMMISSION 

Brussels, 20.7.2010 
COM(2010) 403 final 

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, to 
address additional financing needs of the ITER project 

EN 

   EN 

 
 
  
EXPLANATORY MEMORANDUM 

1. 

INTRODUCTION 

In response to the Council conclusions of 16  November  20091 on the next steps in 
the  ITER  (International  Thermonuclear  Experimental  Reactor)  project2 
the 
Commission  transmitted  to  the  European  Parliament  and  to  the  Council,  on  4  May 
2010, a communication entitled "ITER status and possible way forward"3 addressing 
the financing gap and related governance conditions concerning ITER.  

Following an exchange of views at the Competitiveness Council of 25 and 26 May 
2010, the Spanish Presidency set up an ITER Task Force which concluded its work 
on 25 June 2010. The Council conclusions adopted on that basis confirmed the short-
term  need  identified  in  the  above  mentioned  Commission  Communication  for 
additional commitment appropriations of EUR 1.4 billion (EUR 800 million in 2012 
and EUR 600 million in 2013), in current prices, for 2012 and 2013. Council called 
upon the Commission to present a proposal within the overall ceiling of the current 
multiannual  financial  framework  including  redeployment  within  Heading  1A 
"Competitiveness  for  Growth  and  Employment".  An  extraordinary  ITER  Council 
meeting is scheduled on 27-28 July 2010 to approve the ITER baseline.  

As  a  result  of  the  work  undertaken  by  the  Commission  and  the  Member  States,  a 
clear  vision  of  the  future  of  ITER  has  emerged  which  creates  the  basis  for  the  EU 
position at the ITER Council meeting on 27-28 July. The Commission welcomes the 
Council  conclusions  of  12  July  2010  expressing  its  strong  commitment  to  the 
successful  completion  of  the  ITER  project  and  acknowledges  the  Council's  request 
therein  to  limit  the  F4E  financial  resources  for  the  European  contribution  to  the 
construction period 2007-2020 of ITER to EUR 6.6 billions (in 2008 value) instead 
of EUR 7.2 billions (in 2008 value). This amount of EUR 6.6 billion constitutes the 
reference  amount  for  the  construction  period  of  ITER.  On  this  basis,  the 
sustainability of long term financing of the ITER project can be ensured.  

The  Commission  has  made  clear  its  view  that  the  EU  budget  cannot  be  asked  to 
continue to deal with cost overruns. Therefore, the Commission intends to adopt the 
ITER baseline, currently expected to last until 2020, on the understanding that for the 
period  after  2013  the  EU  budget  will  make  a  fixed,  annual  contribution,  to  be 
decided by the budgetary authority, to the costs of the project and that any future cost 
overruns will not fall on the EU budget.  

The  adoption  of  the  baseline  is  ad  referendum  since  both  arms  of  the  budgetary 
authority  (European  Parliament  and  Council)  are  still  to  approve  and  secure  the 
financing of ITER.  

As  for  the  additional  short-term  financial  needs  for  ITER  (2012  and  2013),  the 
Commission  proposes  a  mix  of  financial  sources  including  redeployment  of  funds 

1 
2 

3 

15815/10, 15818/09. 
Agreement  signed 21  November 2006  on  the  Establishment  of  the  ITER  International  Fusion  Energy 
Organization for the Joint Implementation of the ITER Project (OJ L 358, 16.12.2006, p. 62). 
COM(2010) 226, 4.5.2010. 

EN 

2 

   EN 

                                                 
from  the  Seventh  Research  Framework  Programme  within  Heading  1  A  and  of 
unused funds between headings.  

The present proposal aims at providing an amount of EUR 400 million by means of a 
revision of the multiannual financial framework while keeping the overall ceiling for 
commitment and payment appropriations over the period 2007-2013 unchanged. At 
the  same  time,  an  additional  amount  of  EUR  460  million  will  be  covered  through 
redeployment  from  the  Seventh  Research  Framework  Programme  within  Heading 
1A.  

The  commitment  for  financing  the  remaining  amount  of  EUR  540  million  shall  be 
secured at a later stage, starting with the budgetary conciliation in November 20104 
and,  if  need  be,  the  following  annual  budgetary  procedures  by  using  all  budgetary 
means  foreseen  in  the  multiannual  financial  framework.  The  Commission  proposes 
that  the  European  Parliament,  the  Council  and  the  Commission  adopt  a  joint 
declaration  to  that  purpose,  by  the  latest  in  the  framework  of  the  November  2010 
budgetary conciliation meeting.  

2. 

LEGAL BASIS 

The  Treaty  on  the  Functioning  of  the  European  Union  provides  that  Council  shall 
unanimously  adopt  a  Regulation  laying  down  the  multiannual  financial  framework 
after  obtaining  the  consent  of  the  European  Parliament.  On  3  March  2010,  the 
Commission made a proposal for such a Council regulation5. It is hoped that it will 
be adopted before the end of the year.  

Given  the  importance  of  renewing,  without  further  delay,  the  European  Union's 
political  commitment  to  realising  the  ITER  project,  the  Commission  submits  the 
present proposal under the rules of the Interinstitutional Agreement of 17 May 2006 
on  budgetary  discipline  and  sound  financial  management  (IIA)6  which  remains 
applicable until the new regulation is adopted.  

3. 

USE OF MARGINS AND REDEPLOYMENT WITHIN HEADING 1A 

The margins available under the ceilings of Heading 1A amount to EUR 50.1 million 
for 2011, EUR 34 million for 2012 and EUR 47 million for 2013. No margin is left 
for 2010. With a view to Point 13 of the IIA, which provides that the institutions are 
required to ensure that sufficient margins are left available beneath the ceilings, the 
Commission considers that these margins cannot be used to contribute to cover the 
additional financing needs of the ITER project.  

In  accordance  with  Point  23,  first  paragraph,  of  the  IIA  the  Commission  has 
examined the scope for reallocating expenditure between the programmes covered by 
the heading concerned with the objective that a significant amount, in absolute terms 
and  as  a  percentage  of  the  new  expenditure  planned,  is  made  available  within  the 

4 
5 
6 

Without prejudice to the need of maintaining the necessary margins for budget 2011 
COM(2010) 72.  
OJ C 139, 14.6.2006, p. 1. 

EN 

3 

   EN 

                                                 
existing  ceiling  for  the  heading.  As  a  result,  it  proposes  to  redeploy  an  amount  of 
EUR  100  million  in  2012  and  of  EUR  360  million  in  2013  from  the  Seventh 
Research Framework Programme.  

4. 

TRANSFERS FROM ONE HEADING TO ANOTHER (COMMITMENT APPROPRIATIONS) 

In  accordance  with  Point  23,  second  paragraph,  of  the  IIA  the  Commission  has 
examined  the  scope  for  offsetting  any  raising  of  the  ceiling  for  one  heading  by  the 
lowering of the ceiling for another. 

The margins left under the expenditure ceilings for the Headings other than Heading 
1A for the years 2010 to 2013 are currently estimated as follows7:  

Heading 1B 

Heading 2 

Heading 3 A 

Heading 3 B 

Heading 4 

Heading 5 

2010

1.4

456.2

18.5

0

08

43.5

2011

16.9

851.8

70.7

15.2

70.3

160.6

2012 

1.4 

126.2 

26.5 

18.1 

132.3 

122.7 

2013

0.4

131.4

52.9

22.8

134.6

151.3

With  a  view  to  Point  13  of  the  IIA,  and  taking  account  of  the  possible  financial 
implications  of  the  Lisbon  Treaty,  the  Commission  considers  that  the  margins  left 
under  the  ceilings  of  Heading  1B,  Heading  3A,  Heading  3  B,  Heading  4,  and 
Heading 5 are too tight to contribute to  cover the additional financing needs of the 
ITER project.  

Only  the  margins  under  Heading  2  in  2010  are  at  a  level  that  could  be  used  to 
compensate  the  lack  of  margin  under  Heading  1A,  particularly  once  agriculture 
expenditure for the year 2010 has been confirmed. The current margin left under the 
2010  expenditure  ceiling  of  Heading  2  amounts  to  EUR  456  million.  The 
Commission proposes, at this stage, to lower this ceiling by an amount of EUR 400 
million and to increase the expenditure ceilings of Heading 1A by EUR 160 million 
for the year 2012 and by EUR 240 million for the year 2013.  

The  proposed  adjustment  between  expenditure  ceilings  leaves  a  margin  of  EUR  56 
million  available  under  the  ceiling  of  Heading  2  in  2010.  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. 

7 

8 

For 2010, updated data based on the last Commission's proposals up to Draft Amending Budget 6/2010 
-  COM(2010)  315,  17.6.2010  -  and  for  2011-2013,  financial  programming  as  included  in  the  general 
introduction of the draft budget for 2011 - COM(2010) 300, 15.6.2010. 
Less 18.3 million financed through the flexibility instrument. 

EN 

4 

   EN 

 
                                                 
5. 

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 appropriations need to be modified on the basis of the payment 
profile foreseen for the additional commitments under Heading 1A in 2012 and 2013 
which are offset by the corresponding reduction of commitment appropriations from 
the ceiling of Heading 2 in 2010. The overall ceiling of the financial framework over 
the period 2007-2013 shall remain unchanged. 

6. 

SUMMARY TABLE AND CONCLUSION  

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

(EUR million) 

2007  2008

2009

2010  2011

2012  2013  2007-
2013 
400 

160 

240 

1a. Competitiveness for Growth 
and Employment 

2. Preservation and Management 
of Natural Resources 
Total change in commitment 
appropriations 

Total change in payment 
appropriations 

-400 

0 

0 

0 

-400 

0 

160 

240 

-400 

160 

240 

-400 

0 

0 

The revision keeps the global ceilings for commitment and  payment appropriations 
expressed in current prices unchanged.  

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

The formal decision amending the IIA as regards 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 (see below annex 
to the proposed Decision of the European Parliament and of the Council). 

EN 

5 

   EN 

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 FINANCIAL FRAMEWORK 2007-2013: ADJUSTED FOR ITER (1st phase) 

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

59.555

47.146

1.693

1.025

668

7.893

7.882

0

2011

63.974

12.987

50.987

60.338

47.617

1.889

1.206

683

8.430

8.334

0

(EUR million - current prices)

2013

70.197

15.673

54.524

61.289

48.574

2.376

1.661

715

9.595

9.095

0

Total
2007-2013
438.178

89.763

348.415

412.661

330.085

12.216

7.549

4.667

55.935

55.925

862

2012

67.124

14.363

52.761

60.810

48.093

2.105

1.406

699

8.997

8.670

0

TOTAL COMMITMENT APPROPRIATIONS

124.457

132.797

134.722

140.578

142.965

147.706

152.552

975.777

as a percentage of GNI

1,02%

1,08%

1,16%

1,17%

1,16%

1,15%

1,14%

1,13%

TOTAL PAYMENT APPROPRIATIONS

122.190

129.681

120.445

133.889

134.280

141.520

143.571

925.576

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%

1,12%

0,11%

1,23%

1,09%

0,14%

1,23%

1,10%

0,13%

1,23%

1,08%

0,15%

1,23%

1,07%

0,16%

1,23%

(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.

EN 

6 

EN 

 
  
 
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, to 
address additional financing needs of the ITER project 

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 
management9,  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  [trilogue]/[budgetary  conciliation]  meeting  of  …  …  2010  the  European 
Parliament,  the  Council  and  the  Commission  have  agreed  on  the  modalities  for 
providing additional financing to the ITER project. 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 ceilings for commitment 
appropriations under sub-Heading 1A by EUR 160 million for the year 2012 and by 
EUR 240 million for the year 2013 in current prices. 

The increase of the ceilings for commitment appropriations under sub-Heading 1 A for 
the  years  2012  and  2013  will  be  fully  offset  by  a  decrease  of  the  ceiling  for 
commitment appropriations under Heading 2 for the year 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 in terms of payment requirements over the period 2007-2013. 

(4) 

Annex  I  of  the  Interinstitutional  Agreement  on  budgetary  discipline  and  sound 
financial management should therefore be amended accordingly10, 

9 
10 

OJ C 139, 14.6.2006, p. 1. 
For that purpose, the figures resulting from the above agreement are converted into 2004 prices. 

EN 

7 

   EN 

 
                                                 
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 

EN 

8 

   EN 

 
 
 
 
 
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

52.883

41.864

1.503

910

593

7.009

6.999

0

2011

55.693

11.306

44.387

52.528

41.453

1.645

1.050

595

7.339

7.255

0

2012

57.290

12.259

45.031

51.901

41.047

1.797

1.200

597

7.679

7.400

0

2013

58.737

13.114

45.623

51.284

40.645

1.988

1.390

598

8.029

7.610

0

Total
2007-2013
388.161

79.276

308.885

366.266

293.105

10.765

6.625

4.140

49.463

49.531

800

TOTAL COMMITMENT APPROPRIATIONS

117.277

122.683

122.022

124.829

124.460

126.067

127.648

864.986

as a percentage of GNI

1,08%

1,09%

1,06%

1,06%

1,03%

1,02%

1,01%

1,049%

TOTAL PAYMENT APPROPRIATIONS

115.142

119.805

109.091

118.890

116.899

120.786

120.134

820.747

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%

0,95%

0,29%

1,24%

1,00%

0,23%

1,23%

0,97%

0,26%

1,23%

0,98%

0,25%

1,23%

0,95%

0,28%

1,23%

1,00%

0,23%

1,23%

(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.

EN 

9 

EN