DRAFT AMENDING BUDGET N° 8 TO THE GENERAL BUDGET 2010 STATEMENT OF EXPENDITURE BY SECTION Section III - Commission
Date: 2010-09-24
Institutions: Directorate-General for Budget, European Commission
Subjects: amending budget, draft budget, economic stabilisation, financial aid, general budget, loan

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EUROPEAN COMMISSION 

Brussels, 24.9.2010 
COM(2010) 533 final 

DRAFT AMENDING BUDGET N° 8 
TO THE GENERAL BUDGET 2010 

STATEMENT OF EXPENDITURE BY SECTION 
Section III - Commission 

(presented by the Commission) 

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DRAFT AMENDING BUDGET N° 8 
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 amending budget 1/2010 adopted on 19 May 20103, 

the amending budget 2/2010 adopted on 16 June 20104, 

the amending budget 3/2010 adopted on 7 September, 

the draft amending budgets No 2/20105, 3/20106, 5/20107, 6/20108 and 7/20109. 

The  European  Commission  hereby  presents  to  the  budgetary  authority  the  Draft  Amending 
Budget No 8 to the 2010 budget. 

CHANGES  TO  THE  STATEMENT  OF  REVENUE  AND  EXPENDITURE  BY 
SECTION 

The  changes  to  the  statement  of  revenue  and  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 these statements by section is attached for information as a budgetary annex. 

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OJ L 248, 16.9.2002, p. 1. 
OJ L 64, 12.3.2010. 
OJ L 183, 16.7.2010. 
OJ L 206, 6.8.2010. 
COM(2010) 108 
COM(2010) 149 
COM(2010) 320 
COM(2010) 315 
COM(2010) 383 

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TABLE OF CONTENTS 

1. 

2. 

Introduction .................................................................................................................. 3 

Mobilisation of the EU Solidarity Fund....................................................................... 3 

2.1. 

Ireland: Flooding.......................................................................................................... 3 

3. 

4. 

1. 

Financing...................................................................................................................... 5 

Summary table by heading of the Financial Framework ............................................. 7 

INTRODUCTION 

Draft Amending Budget (DAB) No 8 for the year 2010 covers the following elements: 

–  Mobilisation of the EU Solidarity Fund for an amount of EUR 13,0 million in commitment 
and payment appropriations relating to the effects of severe flooding affecting Ireland. 

–  A  corresponding  reduction  in  payment  appropriations  of  EUR 13,0 million  from  the  line 
04 02 01 — Completion of European Social Fund (ESF) — Objective 1 (2000 to 2006). 

2. 

MOBILISATION OF THE EU SOLIDARITY FUND 

2.1. 

Ireland: Flooding 

In  November  2009,  the  major  part  of  Ireland  was  affected  by  heavy  rain  leading  to  severe 
flooding. The flooding caused severe damage to the agricultural sector, residential properties 
and businesses, to the road network and other infrastructure. 

Subsequently,  Ireland  submitted  an  application  for  financial  assistance  from  the  European 
Union Solidarity Fund. 

The  Commission  services  have  carried  out  a  thorough  examination  of  the  application  in 
accordance with Council Regulation (EC) No 2012/200210 and in particular with Articles 2, 3 
and 4 thereof. The most important elements of the assessment can be summarised as follows: 

(1) 

The  application  was  received  at  the  Commission  on  27  January  2010,  within  the 
deadline of 10 weeks after the first damage was recorded on 19 November 2009. On 
15  June  2010,  following  a  request  by  the  Commission  of  24  March,  the  Irish 
authorities  submitted  further  information  confirming  inter  alia  the  estimated  amount 
for total direct damage and presenting a more refined damage evaluation.  

(2) 

The disaster is of natural origin and therefore falls within the field of application of the 
Solidarity Fund. 

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Council  Regulation  (EC)  No  2012/2002  of  11  November  2002  establishing  the  European  Union 
Solidarity Fund, OJ L 311 of 14.11.2002, p.3. 

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(3) 

(4) 

(5) 

(6) 

(7) 

The  Irish  authorities  estimate  the  total  direct  damage  caused  by  the  disaster  at 
EUR 520,9 million.  This  amount  represents  55,68 %  of  the  normal  threshold  for 
mobilising  the  Solidarity  Fund  applicable  to  Ireland  in  2010  of  EUR 935,45 million 
(i.e. 0,6 % of GNI based on 2008 data). 

As total damage remains below the normal threshold the application was examined on 
the  basis  of  the  so-called  “extraordinary  regional  disaster”  criterion  laid  down  in 
Article  2(2),  final  subparagraph,  of  Regulation  (EC)  No 2012/2002  setting  out  the 
conditions  for  mobilising  the  Solidarity  Fund  “under  exceptional  circumstances”. 
Under this criterion, a region can exceptionally benefit from assistance from the Fund 
where that region has been affected by an extraordinary disaster, mainly a natural one, 
affecting  the  major  part  of  its  population,  with  serious  and  lasting  repercussions  on 
living  conditions  and  the  economic  stability  of  the  region.  The  Regulation  calls  for 
special focus on remote and isolated regions such as the insular and outermost regions 
defined  in  Article  349  of  the  Treaty.  The  Regulation  calls  for  "utmost  rigour"  in 
assessing applications presented under the "extraordinary regional disaster" criterion. 

Ireland is part of the third largest island in Europe situated on the northwestern border 
of  continental  Europe.  While  Ireland  is  not  an  outermost  region  as  defined  in  the 
Treaty  its  insularity  and  remoteness  from  the  European  mainland  clearly  impact  its 
economic situation and make it more vulnerable. These factors cannot be disregarded 
in assessing Ireland's application for Solidarity Fund assistance. 

As set out in the Annual Report on the Solidarity Fund (2002-2003)11 the Commission 
considers that, in order for the specific criteria for regional disasters to be meaningful 
in the national context, a distinction needs to be drawn between serious regional events 
and  those  that  are  merely  local.  In  accordance  with  the  principle  of  subsidiarity  the 
latter  are  the  responsibility  of  the  national  authorities,  while  the  former  can  be 
considered  for  support  under  the  Solidarity  Fund.  The  flooding  disaster  seriously 
affected a major part of Ireland's territory. The Irish authorities claim that the disaster 
has  dramatically  worsened  the  situation  where  Ireland  is  already  suffering  from  the 
most serious economic downturn that the country has seen over the past decades. 

One of the conditions set out in Regulation 2012/2002 for the exceptional mobilisation 
of the Solidarity Fund is that the major part of the population in the region to which 
the application relates must be affected. The region on which the Irish application is 
based  comprises  a  coherent  area  of  15  counties  with  over  1,7  million  inhabitants 
(around two thirds of the Irish territory and 40 % of the population). The application 
describes  the  different  ways  in  which  the  population  was  affected  through  personal 
damage  and  interruption  of  economic  activities,  disruption  of  main  utilities,  and 
interruption and damages to the road network. With the exception of Cork and Galway 
City, the majority of the damage occurred in predominately rural areas where the roads 
infrastructure  is  crucial  to  carry  out  day-to-day  businesses.  Moreover,  in  relation  to 
those  directly  impacted,  a  significant  amount of  individuals  have  received  assistance 
from  the  Social  and  Family  Affairs  Humanitarian  Assistance  Scheme.  A  particular 
factor is the long duration of the flooding which in some areas lasted several months. 
It can thus be concluded, as described in the Irish application, that the major part of the 
population was affected. 

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Annual  report  2002-2003  and  Report  on  the  experience  gained  after  one  year  of  applying  the  new 
instrument, COM(2004) 397 final of 26.5.2004 

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(8) 

As regards the impact and consequences of the flooding as well as the requirement to 
demonstrate  serious  and  lasting  repercussions  on  the  living  conditions  and  the 
economic  stability  of  the  region,  the  application  refers  in  particular  to  the 
destabilisation  of  the  farming  sector  and  the  impact  of  the  flooding  on  the  road 
infrastructure  with  damages  to  the  latter  alone  of  over  EUR 159 million.  The  region 
affected by the flooding includes counties in the Border, Midland and Western NUTS2 
region  where  the  gross  value  added  (GVA)  per  person  is  only  69,3 %  of  the  State 
average (data of 2007). The Midland region has the lowest GVA per person at 65.8 % 
of  State  average.  With  the  sharp  economic  downturn  of  the  past  years  and  few 
employment opportunities  at  present,  the flooding caused even a  higher employment 
deficit. Moreover, the share of GVA of agriculture within the affected region is higher 
than in all other regions of Ireland. Many farmers had to be granted aid under the Aid 
Scheme  for  Damaged  Fodder  as  their  complete  fodder  stocks  had  been  destroyed. 
Disruption  to  farming  production  impacts  proportionately  on  a  greater  number  of 
people  in  the  affected  regions  in  a  more  significant  way  than  would  be  the  case  in 
regions  les  dependent  on  the  agricultural  sector.  The  insularity  of  Ireland  and  the 
relative  remoteness  from  mainland  European  economies  add  to  the  difficulties  to 
recover  from  an  already  challenging  situation.  Over  all,  it  can  be  concluded  that  the 
flooding  caused  serious  and  lasting  repercussions  on  the  living  conditions  and  the 
economic stability in a predominately rural area struggling to improve living standards 
and encourage investment opportunities. 

(9) 

The  cost  of  operations  eligible  under  Article  3(2)  of  Regulation  2012/2002  is 
estimated  at  EUR 111,5 million  and  broken  down  into  4  categories:  A)  immediate 
restoration to working conditions of infrastructure, B) temporary accommodation and 
rescue  services,  C)  preventive  infrastructures  and  immediate  protection  of  cultural 
heritage and D) cleaning up of disaster stricken areas/zones. 

(10)  The  affected  regions  are  eligible  as  "Competitiveness  and  Employment  Regions" 
(8 regions)  and  "Phasing-in  regions"  (7  regions)  under  the  Structural  Funds  (2007-
2013). 

(11)  As regards a possible coverage of eligible damage by insurance, the Irish authorities 

indicated that there is no insurance coverage of eligible cost. 

In conclusion, for the reasons set out above, the flooding referred to in the application can be 
considered  to  be  extraordinary  within  the  meaning  of  the  Regulation  and  to  meet  the 
conditions  set  out  by  Article  2(2),  last  subparagraph,  of  Regulation  2012/2002  for 
exceptionally mobilising the Solidarity Fund. 

3. 

FINANCING 

The total annual budget available for the Solidarity Fund is EUR 1 billion. As solidarity was 
the central justification for the creation of the Fund, the Commission takes the view that aid 
from  the  Fund  should  be  progressive.  That  means  that,  according  to  previous  practice,  the 
portion  of  the  damage  exceeding  the  threshold  (0,6 %  of  the  GNI  or  EUR 3 billion  in  2002 
prices, whichever is the lower amount) should give rise to higher aid intensity than damage up 
to the threshold. The rate applied in the past for defining the allocations for major disasters is 
2,5 % of total direct damage under the threshold for mobilising the Fund and 6 % above. The 

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methodology for calculating Solidarity Fund aid was set out in the 2002-2003 Annual Report 
on the Solidarity Fund and accepted by the Council and the European Parliament. 

It  is  proposed  to  apply  the  same  percentages  in  this  case  and  to  grant  the  following  aid 
amounts: 

Direct damage 

Threshold 

Amount based 
on 2.5 % 

Amount based on 
6 % 

(EUR) 
Total amount of 
aid proposed 

520 900 000 

935 456 000 

13 022 500 

0 

13 022 500 

13 022 500

Ireland, 2009 
flooding 
Total 

This amount of compensation will leave at least 25 % of the European Union Solidarity Fund 
available  for  allocation  during  the  last  quarter  of  the  year,  as  required  by  Article  4(2)  of 
Regulation (EC) 2012/2002. 

At the current stage the expected needs on budget line 04 02 01 — Completion of European 
Social  Fund  (ESF)  —  Objective  1  (2000  to  2006)  are  such  that  payment  appropriations  of 
EUR 13 022 500 may be reallocated to budget line 13 06 01 to cover the corresponding needs 
related to the mobilisation of the EU Solidarity Fund. 

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4. 

SUMMARY TABLE BY HEADING OF THE FINANCIAL FRAMEWORK 

Financial framework 
Heading/subheading 

2010 Financial framework 

Budget 2010 
(including AB 1 to AB 3 and  
DAB 2 to DAB 3 + DAB 5 to DAB7)

DAB 8/2010 

Budget 2010 
(including AB 1 to AB 3 and  
DAB 2 to DAB 3 + DAB 5 to DAB8) 

CA 

PA 

CA 

PA 

CA 

PA 

CA 

PA 

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

Total 
Margin12 

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 

Total 
Margin 

Total 
Margin13   

4. EU AS A GLOBAL PLAYER14 

5. ADMINISTRATION15 

Margin 

Margin 
TOTAL 

Margin   

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

7 893 000 000

7 882 000 000

140 978 000 000

134 289 000 000

14 861 853 253

11 342 270 803

14 861 853 253

11 342 270 803 

49 387 592 092
64 249 445 345

-194 445 345  

36 384 885 000
47 727 155 803

-13 022 500

49 387 592 092
64 249 445 345

36 371 862 500 
47 740 178 303 

-194 445 345  

43 819 801 768

43 701 207 586

43 819 801 768

43 701 207 586 

59 498 833 302

58 135 640 809

456 166 698  

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
7 918 504 785
43 495 215
141 501 452 802
518 729 198

+13 022 500
+13 022 500

+13 022 500
+13 022 500

738 570 370
659 387 500
1 397 957 870

7 787 695 183

7 917 999 785

122 966 449 450
11 651 432 550

+13 022 500

1 006 487 370
681 022 500
1 687 509 870

18 512 630  

8 160 182 000
-18 300 000
7 918 504 785
43 495 215
141 514 475 302
518 729 198

738 570 370 
672 410 000 
1 410 980 370 

7 787 695 183 

7 917 999 785 

122 966 449 450 
11 651 432 550 

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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). 
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 80 million for the staff 
contributions to the pension scheme. 

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