Proposal for a COUNCIL REGULATION (EU) No …/… amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure
Date: 2010-09-29
Institutions: European Commission
Subjects: Economic and Monetary Union, European accounting system, budget deficit, budget policy, budgetary control, public administration, public debt, public finance

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EUROPEAN COMMISSION 

Brussels, 29.9.2010 
COM(2010) 522 final 

2010/0276 (CNS) 

Proposal for a 

COUNCIL REGULATION (EU) No …/… 

amending Regulation (EC) No 1467/97 on speeding up and clarifying the 
implementation of the excessive deficit procedure 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

The global economic and financial crisis has exposed and amplified the need for greater co-
ordination  and  enhanced  surveillance  of  economic  policies  in  the  economic  and  monetary 
union  (EMU).  Existing  instruments  and  methods  of  co-ordination  and  surveillance  enabled 
the  EU  to  weather  a  storm  that  no  Member  State  could  have  withstood  on  its  own.  The 
European institutions and Member States reacted quickly and are continuing to work together 
to recover from a crisis that has no precedent in our generation. 

However,  these  recent  experiences  also  revealed  remaining  gaps  and  weaknesses  in  the 
current system of coordination and in the existing surveillance procedures. There is a broad 
agreement  that  the  framework  for  EMU  should  be  urgently  strengthened  in  order  to  anchor 
macroeconomic stability and the sustainability of public finances, which are preconditions for 
durable output and employment growth. 

The  crisis  has  drastically  reversed  the  favourable  economic  and  financial  conditions  that 
prevailed until 2007 and made clear yet again that windfalls accumulated during good times 
had  not  been  sufficiently  used  to  create  room  for  manoeuvre  when  times  turn  bad.  Very 
sizeable consolidation will be necessary in most Member States to bring public debt back onto 
a downward path. This is all the more urgent as European societies and economies are facing 
the effects of ageing populations, which will put further pressure on labour supply and public 
budgets. Reducing debt levels is highly relevant for most countries in view of their negative 
effects on economic incentives and growth through higher taxes and risk premia. 

The key instrument for fiscal policy co-ordination and surveillance is the Stability and Growth 
Pact (SGP), which implements the Treaty provisions on budgetary discipline. Strengthening 
the Pact is important for both increasing the credibility of the agreed co-ordinated fiscal exit 
strategy and avoiding a repetition of past mistakes. The set of proposals now being presented 
aims to strengthen the Pact by: (i) improving its provisions in the light of experience, not least 
of  the  crisis;  (ii)  equipping  it  with  more  effective  enforcement  instruments;  and  (iii) 
complementing it with provisions on national fiscal frameworks. This set of proposals is part 
of a broader reform of economic governance under the umbrella of the Europe 2020 strategy, 
which  includes  proposals  for  addressing  macroeconomic  imbalances  through  stronger 
surveillance,  including  alert  and  sanction  mechanisms.  The  different  strands  of  economic 
policy coordination, including surveillance of structural reforms, are to be integrated in a new 
surveillance cycle, the European Semester, which will bring together existing processes under 
the  SGP  and  the  Broad  Economic  Policy  Guidelines,  including  simultaneous  submission  of 
stability and convergence programmes and national reform programmes. 

2. 

RESULTS OF CONSULTATIONS WITH INTERESTED PARTIES  

The  outlines  of  the  present  proposals  were  announced  by  the  Commission  in  two 
communications: Reinforcing economic policy coordination of 12 May 2010 and Enhancing 
economic policy coordination for stability, growth and jobs – Tools for stronger EU economic 
governance of 30 June 2010. In opting for a formal communication, the Commission wished 
to  demonstrate  its  commitment  to  fostering  dialogue  with  Member  States,  the  European 

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Parliament  and  all  stakeholders,  while  at  the  same  time  delivering  concrete  proposals  for 
action. 

In June 2010, the European Council agreed on the urgent need to reinforce the coordination of 
our  economic  policies.  The  agreement  included  first  orientations  as  regards  the  SGP  and 
budgetary surveillance. In particular, the European Council agreed on: (i) strengthening both 
the  preventive  and  corrective  parts  of  the  SGP,  including  with  sanctions  and  taking  due 
account  of  the  particular  situation  of  euro-area  Member  States;  (ii)  giving,  in  budgetary 
surveillance,  a  much  more  prominent  role  to  levels  and  evolutions  of  debt  and  overall 
sustainability; (iii) ensuring that all Member States have national budgetary rules and medium 
term budgetary frameworks in line with the SGP; (iv) ensuring the quality of statistical data. 

The  European  Council  invited  the  Task  Force  on  economic  governance  chaired  by  its 
President and established in March 2010 and the Commission to rapidly develop further and 
make  operational  these  orientations.  A  constructive  relationship  developed  between  the 
Commission and the Task Force. The Commission contributed to the work of the Task Force 
through the Communications referred to above and through ad hoc contributions. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

The  legal  basis  for  the  SGP  is  laid  down  in  Articles  121  and  126  of  the  Treaty  on  the 
Functioning  of  the  European  Union.  The  SGP  consists  of:  Council  Regulation  (EC)  No 
1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the 
surveillance  and  coordination  of  economic  policies  (referred  to  as  preventive  part);  Council 
Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation 
of  the  excessive  deficit  procedure  (referred  to  as  corrective  part);  and  the  Resolution  of  the 
European Council of 17 June 1997 on the Stability and Growth Pact. These Regulations were 
amended  in  2005  by  Regulations  (EC)  No  1055/2005  and  (EC)  No  1056/2005  and 
complemented by the Council Report of 20 March 2005 on ‘Improving the implementation of 
the Stability and Growth Pact’. The present proposals seek further amendments to Regulations 
No 1466/97 and (EC) No 1467/97. Additional enforcement instruments are proposed in a new 
Regulation  of  the  European  Parliament  and  the  Council  on  the  effective  enforcement  of 
budgetary  surveillance  in  the  euro  area,  based  on  Article  136  of  the  Treaty,  in  combination 
with Article 121(6). The requirements for the budgetary frameworks of the Member States are 
the  subject  of  a  new  Council  Directive  based  on  Article  126(14):  the  Directive  aims  in 
particular  to  specify  the  obligations  of  national  authorities  to  comply  with  the  provisions  of 
Article 3 of Protocol No 12 to the Treaties on the excessive deficit procedure. 

The preventive part of the SGP is meant to ensure that Member States follow prudent fiscal 
policies so that there is no need to adopt more stringent forms of coordination to avoid public 
finance  sustainability  being  put  at  risk,  with  potential  negative  consequences  for  EMU  as  a 
whole.  Accordingly,  Member  States  are  required  to  present  stability  and  convergence 
programmes  outlining  their  plans  to  achieve  medium-term  budgetary  objectives  (MTOs), 
which are defined as a percentage of GDP in structural terms (i.e. adjusting for the effect of 
the  cycle  and  excluding  one-off  and  temporary  measures)  and  are  differentiated  across 
countries around a close-to-balance position to reflect the level of public debt and liabilities 
related  to  ageing.  Member  States  not  having  reached  their  MTO  are  expected  to  converge 
towards it at an annual pace of 0.5% of GDP in structural terms. 

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However,  progress  towards  MTOs  has  been  generally  insufficient,  leaving  public  finances 
badly  exposed  to  the  economic  downturn.  Moreover,  the  structural  balance  has  in  practice 
proved  an  insufficient  measure  of  a  country’s  underlying  fiscal  position,  owing  to  the 
difficulty  of  assessing  the  cyclical  position  of  the  economy  in  real  time  and  to  insufficient 
account being taken of revenue windfalls and shortfalls not directly related to the economic 
cycle (in particular housing and financial market developments). As a result, in a number of 
countries,  even  apparently  sound  budgetary  positions  before  the  crisis  masked  a  strong 
reliance  on  windfall  revenues  to  finance  expenditure,  the  reversal  of  which  contributed  to 
soaring budget deficits. 

To  respond  to  these  shortcomings  the  reform  of  the  preventive  part  that  is  being  proposed, 
while  retaining  the  current  MTOs  and  the  0.5%  of  GDP  annual  convergence  requirement, 
makes  them  operational  in  terms  of  a  new  principle  of  prudent  fiscal  policy-making.  This 
principle implies that annual expenditure growth should not exceed – and if the MTO has not 
been  achieved  should  be  clearly  below  –  a  prudent  medium-term  rate  of  growth  of  GDP, 
unless the MTO has been significantly overachieved or the excess of expenditure growth over 
the prudent medium-term rate is matched by discretionary measures on the revenue side. The 
essential aim is to ensure that revenue windfalls are not spent but are instead allocated to debt 
reduction. The new principle will provide the benchmark against which countries’ fiscal plans 
in the stability and convergence programme will be examined. Additionally, failure to respect 
keep to the agreed rate of growth of expenditure, in conjunction with the stipulated revenue 
measures, will make the Member State concerned liable to a warning from the Commission 
and,  if  persistent  and/or  particularly  serious,  a  Council  recommendation  to  take  corrective 
action issued under Article 121 of the Treaty. Such a recommendation, while being issued in 
the  context  of  the  preventive  part,  would  be  backed,  for  the  first  time  and  for  euro-area 
countries only, by an enforcement mechanism under Article 136 of the Treaty, in the form of 
an  interest-bearing  deposit,  amounting  to  0.2%  of  GDP.  A  procedure  of  ‘reverse  voting’ 
mechanism  is  introduced  for  imposing  the  interest-bearing  deposit:  on  the  issue  of  a 
recommendation, the deposit would become due on proposal by the Commission, unless the 
Council  decides  to  the  contrary  by  qualified  majority  within  ten  days.  The  Council  could 
reduce the amount of the deposit only unanimously or based on a Commission proposal and a 
reasoned  request  from  the  Member  State  concerned.  The  deposit  will  be  returned  with  the 
accrued interest once the Council is satisfied that the situation giving rise to it has come to an 
end. 

The  corrective  part  of  the  SGP  is  meant  to  avoid  gross  errors  in  budgetary  policies,  which 
might  put  at  risk  the  sustainability  of  public  finances  and  potentially  endanger  EMU.  This 
translates into the obligation for Member States to avoid excessive government deficits, which 
are defined against a numerical threshold for deficit (3% of GDP) and debt (60% of GDP or 
sufficiently declining toward it). The excessive deficit procedure (EDP) that implements the 
ban  on  excessive  deficits  provides  for  a  sequence  of  steps,  which,  for  euro-area  countries, 
include the eventual imposition of financial sanctions. 

The  EDP  has  been  regularly  applied  in  line  with  the  relevant  provisions,  even  against  the 
background  of  the  exceptional  circumstances  of  the  financial  crisis,  thereby  contributing  to 
anchoring  expectations  of  its  orderly  resolution.  However  a  number  of  shortcomings  have 
emerged.  While  the  deficit  and  the  debt  criterion  are  in  principle  on  an  equal  footing,  and 
persistently  high  levels  of  debt  arguably  represent  a  more  serious  threat  to  public  finance 
sustainability than occasionally high deficits, in practice the ‘3% of GDP’ threshold has been 
the almost exclusive focus of the EDP, with debt playing a marginal role so far. This owes to 
the  less  straightforward  nature  of  the  debt  threshold  compared  to  the  deficit,  including  the 

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ambiguity of the notion of sufficiently diminishing pace of reduction and the greater impact 
on  the  debt  ratio  of  variables  outside  the  control  of  the  government,  notably  inflation.  The 
EDP  is  backed  in  principle  by  a  strong  enforcement  mechanism,  as  financial  sanctions  can, 
and  should  be,  imposed  in  the  event  of  persistent  failure  to  correct  an  excessive  deficit. 
However,  such  sanctions  arguably  come  into  play  too  late  in  the  process  to  represent  an 
effective deterrent against gross fiscal policy errors, not least because the financial situation of 
the  country  concerned  may  have  deteriorated  so  much  as  to  make  the  threat  of  a  fine  less 
credible at the very time when it should become real. Finally, the recent crisis has highlighted 
that if the obligation to correct excessive deficits contributes to anchoring the expectation that 
government solvency will be maintained, the timeline of the correction and the profile of the 
adjustment may have to reflect EMU-wide considerations. 

To respond to these shortcomings the following key proposals for the reform of the corrective 
part are being put forward. 

The  debt  criterion  of  the  EDP  is  to  be  made  operational,  notably  through  the  adoption  of  a 
numerical benchmark  to  gauge  whether the debt ratio is sufficiently diminishing toward the 
60%  of  GDP  threshold.  Specifically,  a  debt-to-GDP  ratio  above  60%  is  to  be  considered 
sufficiently  diminishing  if  its  distance  with  respect  to  the  60%  of  GDP  reference  value  has 
reduced over the  previous three years at  a  rate of the  order  of one-twentieth per year. Non- 
compliance with this numerical benchmark is not, however, necessarily expected to result in 
the country concerned being placed in excessive deficit, as this decision would need to take 
into  account  all  the  factors  that  are  relevant,  in  particular  for  the  assessment  of  debt 
developments,  such  as  whether  very  low  nominal  growth  is  hampering  debt  reduction, 
together with risk factors linked to the debt structure, private sector indebtedness and implicit 
liabilities  related  to  ageing.  In  line  with  the  greater  emphasis  on  debt,  more  consideration 
should be given to relevant factors in the event of non-compliance with the deficit criterion, if 
a country has a debt below the 60% of GDP threshold. 

The more flexible approach put forward with respect to considering the relevant factors in the 
steps  of  determining  the  existence  of  an  excessive  deficit  could  also  benefit  countries 
undertaking  systemic  pension  reforms,  beyond  the  currently  foreseen  five-year  transitory 
period.  The  special  provisions  of  the  SGP  for  systemic  pension  reforms  with  regards  the 
deficit criterion are also extended to the debt criterion; through establishing the same five-year 
transitory period for considering the net costs of such reforms when assessing the compliance 
with  the  debt  criterion.  Finally,  equal  consideration  shall  be  given  to  the  partial  or  total 
reversal of previously implemented systemic pension reforms, during both the launch and the 
abrogation of an EDP. 

Enforcement  is  strengthened  by  introducing  a  new  set  of  financial  sanctions  for  euro-area 
Member  States,  which  would  apply  much  earlier  in  the  process  according  to  a  graduated 
approach.  Specifically,  a  non-interest-bearing  deposit  amounting  to  0.2%  of  GDP  would 
apply upon a decision to place a country in excessive deficit, which would be converted into a 
fine in the event of non-compliance with the initial recommendation to correct the deficit. The 
amount is equal to the fixed component of the sanctions already provided for in the final step 
of  the  EDP.  It  also  bears  a  link  with  the  EU  budget,  which  should  facilitate  the  envisaged 
move to a system of enforcement based on the EU budget as outlined in the above-mentioned 
Commission  Communication  of  30  June  2010.  Further  non-compliance  would  result  in  the 
sanction being stepped up, in line with the already existing provisions in the SGP. To reduce 
discretion in enforcement, the ‘reverse voting’ mechanism is envisaged for imposing the new 
sanctions in connection with the successive steps of the EDP. Specifically, at each step of the 

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EDP,  the  Commission  will  make  a  proposal  for  the  relevant  sanction,  and  this  will  be 
considered  adopted,  unless  the  Council  decides  to  the  contrary  by  qualified  majority  within 
ten  days.  The  size  of  the  non-interest-bearing  deposit  or  the  fine  could  only  be  reduced  or 
cancelled by the Council unanimously or based on a specific proposal from the Commission 
on  grounds  of  exceptional  economic  circumstances  or  following  a  reasoned  request  by  the 
Member State concerned. 

Moreover,  the  criteria  for  assessing  compliance  with  the  recommendations  at  each  step, 
including  the  possibility  of  allowing  an  extension  of  the  deadlines  for  the  correcting  the 
excessive deficit, are clarified by placing explicit emphasis on the fiscal variables that can be 
assumed  to  be  under  the  direct  control  of  the  government,  in  particular  expenditure,  by 
analogy  with  the  approach  proposed  for  the  preventive  part.  Beyond  these  country-specific 
circumstances, the possibility is introduced of extending the deadlines also in the event of a 
general economic crisis. 

Effective enforcement of the EMU budgetary coordination framework cannot be expected to 
derive  only  from  provisions  laid  down  at  EU  level.  The  particular  decentralised  nature  of 
fiscal policy-making in the EU and the general need for national ownership of EU rules make 
it essential that the objectives of the EMU budgetary coordination framework are reflected in 
the  national  budgetary  frameworks.  A  national  budgetary  framework  is  the  set  of  elements 
that form the basis of national fiscal governance, i.e. the country-specific institutional policy 
setting  that  shapes  fiscal  policy-making  at  national  level.  This  includes  public  accounting 
systems,  statistics,  forecasting  practices,  numerical  fiscal  rules,  budgetary  procedures 
governing  all  stages  of  the  budget  process  and  medium  term  budgetary  frameworks  in 
particular, and fiscal relations across government sub-sectors. While Member States’ specific 
needs and preferences must be respected, a number of features stand out as being needed in 
terms  of  ensuring  minimum  quality  and  consistency  with  the  EMU  budgetary  framework. 
These  are  the  subject  of  the  Directive  on  national  budgetary  frameworks  that  is  being 
proposed  to  complement  the  reform  of  the  SGP.  Such  features  firstly  require  that  the  most 
primary elements of national budgetary frameworks, namely accounting and statistical issues 
and  forecasting  practices,  work  in  line  with  minimum  European  standards  to  facilitate 
transparency  and  the  monitoring  of  fiscal  developments.  Domestic  budgetary  frameworks 
need also to adopt a multi-annual fiscal planning perspective so as to ensure the achievement 
of  the  medium-term  objectives  set  at  EU  level.  Additionally,  Member  States  must  have  in 
place  numerical  fiscal  rules  conducive  to  compliance  with  the  deficit  and  debt  thresholds. 
Member  States  must  ensure  that  these  features  apply  to  all  general  government  sub-sectors. 
National authorities must also guarantee the transparency of the budget process by providing 
detailed  information  on  existing  extra-budgetary  funds,  tax  expenditures  and  contingent 
liabilities. 

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2010/0276 (CNS) 

Proposal for a 

COUNCIL REGULATION (EU) No …/… 

amending Regulation (EC) No 1467/97 on speeding up and clarifying the 
implementation of the excessive deficit procedure 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, and in particular the 
second subparagraph of Article 126(14) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Parliament1, 

Having regard to the opinion of the European Central Bank (ECB), 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

The coordination of the economic policies of the Member States within the Union, as 
provided by the Treaty, should entail compliance with the guiding principles of stable 
prices,  sound  public  finances  and  monetary  conditions  and  a  sustainable  balance  of 
payments.  

The  Stability  and  Growth  Pact  initially  consisted  of  Council  Regulation  (EC)  No 
1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions 
and the surveillance and coordination of economic policies2, Council Regulation (EC) 
No 1467/97 of 7 July 1997  on speeding up and clarifying the implementation  of  the 
excessive  deficit  procedure3  and  the  Resolution  of  the  European  Council  of  17  June 
1997  on  the  Stability  and  Growth  Pact4.  Regulations  (EC)  No  1466/97  and  (EC)  No 
1467/97  were  amended  in  2005  by  Regulations  (EC)  No  1055/2005  and  (EC)  No 
1056/2005  respectively.  In  addition,  the  Council  Report  of  20  March  2005  on 
'Improving the implementation of the Stability and Growth Pact' was adopted. 

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2 
3 
4 

OJ C , , p. . 
OJ L 209, 2.8.1997, p. 1. 
OJ L 209, 2.8.1997, p. 6. 
OJ C 236, 2.8.1997, p. 1. 

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(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

The Stability and Growth Pact is based on the objective of sound government finances 
as a means of strengthening the conditions for price stability and for strong sustainable 
growth underpinned by financial stability and conducive to employment creation.  

The common framework for economic governance requires to be enhanced, including 
with  regard  to  budgetary  surveillance,  in  line  with  the  high  degree  of  integration 
achieved by Member States economies within the European Union, and particularly in 
the euro area. 

The  rules  on  budgetary  discipline  should  be  strengthened  in  particular  by  giving  a 
more prominent role to the level and evolution of debt and overall sustainability. 

Implementing the existing excessive deficit procedure on the basis of both the deficit 
criterion and the debt criterion requires defining a numerical benchmark against which 
to  assess  whether  the  ratio  of  government  debt  to  gross  domestic  product  is 
sufficiently diminishing and approaching the reference value at a satisfactory pace. 

The establishment of the existence of an excessive deficit based on the debt criterion 
and  the  steps  leading  to  it  should  not  be  based  solely  on  non-compliance  with  the 
numerical benchmark, but always take into account the whole range of relevant factors 
covered by the Commission report under Article 126(3) of the Treaty. 

In  the  establishment  of  the  existence  of  an  excessive  deficit  based  on  the  deficit 
criterion and the steps leading to it there is a need to take into account the whole range 
of  relevant  factors  covered  by  the  report  under  Article  126(3)  of  the  Treaty  if  the 
government debt to gross domestic product does not exceed the reference value. 

The  Commission  report  under  Article  126(3)  of  the  Treaty  should  appropriately 
consider  the  quality  of  the  national  fiscal  framework,  as  it  plays  a  crucial  role  in 
supporting fiscal consolidation and sustainable public finances. 

(10) 

In order to support the monitoring of compliance with Council recommendations and 
notices  for  the  correction  of  the  situations  of  excessive  deficit,  there  is  a  need  that 
these specify annual budgetary targets consistent with the required fiscal improvement 
in cyclically adjusted terms, net of one-off and temporary measures. 

(11)  The  assessment  of  effective  action  will  benefit  from  taking  compliance  with  general 
government expenditure targets as a reference in conjunction with the implementation 
of planned specific revenue measures. 

(12) 

(13) 

(14) 

In  assessing  the  case  for  an  extension  of  the  deadline  for  correcting  the  excessive 
deficit,  special  consideration  should  be  given  to  severe  economic  downturns  of  a 
general nature. 

It  is  appropriate  to  step  up  the  application  of  the  financial  sanctions  envisaged  by 
Article  126(11)  of  the  Treaty  so  that  they  constitute  a  real  incentive  for  compliance 
with the notices under Article 126(9). 

In order to ensure compliance with the fiscal surveillance framework of the Union for 
participating Member States, rules-based sanctions should be designed on the basis of 
Article  136  of  the  Treaty,  ensuring  fair,  timely  and  effective  mechanisms  for 
compliance with the Stability and Growth pact rules. 

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(15)  References contained in Regulation (EC) No 1467/97 should take account of the new 
Article numbering of the Treaty on the Functioning of the European Union and to the 
replacement of Council Regulation (EC) No 3625/93 by Council Regulation (EC) No 
479/2009 of 25 May 2009 on the application of the Protocol on the excessive deficit 
procedure annexed to the Treaty establishing the European Community5. 

(16)  Regulation (EC) No 1467/97 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1467/97 is amended as follows: 

1. 

Article 1 is replaced by the following: 

'Article 1 

1.  This  Regulation  sets  out  the  provisions  to  speed  up  and  clarify  the  excessive 
deficit procedure, having as its objective to deter excessive government deficits and, 
if  they  occur,  to  further  prompt  their  correction,  where  compliance  with  the 
budgetary  discipline  is  examined  on  the  basis  of  the  government  deficit  and 
government debt criteria. 

2. For the purpose of this Regulation 'participating Member States' shall mean those 
Member States whose currency is the euro.' 

2. 

Article 2 is amended as follows: 

(a) 

in paragraph 1, the first subparagraph is replaced by the following: 

The  excess  of  a  government  deficit  over  the  reference  value  shall  be 
'1. 
considered exceptional, in accordance with the second indent of Article 126 (2) 
(a) of the Treaty, when resulting from an unusual event outside the control of 
the  Member  State  concerned  and  which  has  a  major  impact  on  the  financial 
position  of  general  government,  or  when  resulting  from  a  severe  economic 
downturn.' 

(b) 

the following paragraph 1a is inserted: 

'1a.  When it exceeds the reference value, the ratio of the government debt to 
gross domestic product (GDP) is to be considered sufficiently diminishing and 
approaching  the  reference  value  at  a  satisfactory  pace  in  accordance  with 
Article 126 (2) (b) of the Treaty if the differential with respect to the reference 
value has reduced over the previous three years at  a  rate of  the order  of  one-
twentieth per year. For a period of 3 years from [date of entering into force of 
this  Regulation  -  to  be  inserted],  account  shall  be  taken  of  the  backward-
looking nature of this indicator in its application.'  

5 

OJ L 145, 10.6.2009 p. 1. 

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(c) 

paragraph 3 is replaced by the following: 

'3. 
The  Commission, when preparing a  report under Article 126(3) of the 
Treaty  shall  take  into  account  all  relevant  factors  as  indicated  in  that  Article. 
The  report  shall  appropriately  reflect  developments  in  the  medium-term 
economic  position  (in  particular  potential  growth,  prevailing  cyclical 
conditions, inflation, excessive macroeconomic imbalances) and developments 
in  the  medium-term  budgetary  position  (in  particular,  fiscal  consolidation 
efforts in ‘good times’, public investment, the implementation of policies in the 
context of the common growth strategy for the Union and the overall quality of 
public  finances,  in  particular,  compliance  with  Council  Directive  […]  on 
requirements  for  budgetary  frameworks  of  the  Member  States).  The  report 
shall also analyse developments in the medium-term debt position as relevant 
(in  particular,  it  appropriately  reflects  risk  factors  including  the  maturity 
structure  and  currency  denomination  of  the  debt,  stock-flow  operations, 
accumulated reserves and other government assets; guarantees, notably linked 
to the financial sector; liabilities both explicit and implicit related to ageing and 
private debt to the extent that it may represent a contingent implicit liability for 
the government). Furthermore, the Commission shall give due consideration to 
any  other  factors  which,  in  the  opinion  of  the  Member  State  concerned,  are 
relevant in order to comprehensively assess in qualitative terms the excess over 
the  reference  value  and  which  the  Member  State  has  put  forward  to  the 
Commission and to the Council. In that context, special consideration shall be 
given  to  financial  contributions  to  fostering  international  solidarity  and  to 
achieving Union policy goals, including financial stability.'  

(d)  paragraph 4 is replaced by the following: 

'4. 
The  Commission  and  the  Council  shall  make  a  balanced  overall 
assessment  of  all  the  relevant  factors,  specifically,  the  extent  to  which  they 
affect the assessment of compliance with the deficit and/or the debt criteria as 
aggravating or mitigating factors. When assessing compliance on the basis of 
the  deficit  criterion,  if  the  ratio  of  the  government  debt  to  GDP  exceeds  the 
reference value, these factors shall be taken into account in the steps leading to 
the decision on the existence of an excessive deficit provided for in paragraphs 
4,  5  and  6  of  Article  126  of  the  Treaty  only  if  the  double  condition  of  the 
overarching  principle  —  that,  before  these  relevant  factors  are  taken  into 
account,  the  general  government  deficit  remains  close  to  the  reference  value 
and its excess over the reference value is temporary — is fully met.' 

(e) 

paragraph 7 is replaced by the following: 

'7. 
In  the  case  of  Member  States  where  the  excess  of  the  deficit  or  the 
breach of the requirements of the debt criterion according to Article 126 (2) (b) 
of  the  Treaty  reflects  the  implementation  of  a  pension  reform  introducing  a 
multi-pillar  system  that  includes  a  mandatory,  fully  funded  pillar,  the 
Commission and the Council shall also consider the cost of the reform to the 
publicly managed pillar when assessing developments in EDP deficit and debt 
figures. In cases where  the debt  ratio  exceeds the reference value, the cost of 
the reform shall be considered only if the deficit remains close to the reference 
value. For that purpose, for a period of five years starting from the date of entry 

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into  force  of  such  a  reform,  consideration  shall  be  given  to  its  net  cost  as 
reflected  in  deficit  and  debt  developments  on  the  basis  of  a  linear  degressive 
scale. Additionally, irrespective of the date of entry into force of the reform, its 
net  cost  as  reflected  in  debt  developments  shall  be  given  consideration  for  a 
transitional  period  of  five  years  from  [date  of  entry  into  force  of  this 
Regulation, to be inserted] on the basis of the same linear degressive scale. The 
net cost as thus calculated shall be taken into account also for the decision of 
the Council under Article 126(12) of the Treaty on the abrogation of some or 
all of its decisions under paragraphs 6 to 9 and 11 of Article 126 of the Treaty, 
if  the  deficit  has  declined  substantially  and  continuously  and  has  reached  a 
level that comes close to the reference value and, in case of non-fulfilment of 
the  requirements  of  the  debt  criterion,  the  debt  has  been  put  on  a  declining 
path. Moreover, equal consideration shall be given to the reduction in this net 
cost resulting from the partial or total reversal of an above mentioned pension 
reform.' 

3. 

Article 3 is amended as follows: 

(a) 

paragraph 2 is replaced by the following: 

Taking  fully  into  account  the  opinion  referred  to  in  paragraph  1,  the 
'2. 
Commission,  if  it  considers  that  an  excessive  deficit  exists,  shall  address  an 
opinion  and  a  proposal  to  the  Council  in  accordance  with  Article  126(5)  and 
(6) of the Treaty.' 

(b) 

In  paragraph  3,  the  reference  to  'Article  4(2)  and  (3)  of  Regulation  (EC)  No 
3605/93' is replaced by the reference to 'Article 3(2) and (3) of Regulation (EC) 
No 479/2009'. 

(c) 

paragraph 4 is replaced by the following: 

to  be 

taken  by 

The  Council  recommendation  made  in  accordance  with  Article  126(7) 
'4. 
of  the  Treaty  shall  establish  a  deadline  of  six  months  at  most  for  effective 
action 
the  Member  State  concerned.  The  Council 
recommendation  shall  also  establish  a  deadline  for  the  correction  of  the 
excessive  deficit,  which  should  be  completed  in  the  year  following  its 
identification  unless  there  are  special  circumstances.  In  the  recommendation, 
the  Council  shall  request  that  the  Member  State  achieves  annual  budgetary 
targets  which,  on  the  basis  of  the  forecast  underpinning  the  recommendation, 
are consistent with a minimum annual improvement of at least 0,5 % of GDP 
as a benchmark, in its cyclically adjusted balance net of one-off and temporary 
measures, in order to ensure the correction of the excessive deficit within the 
deadline set in the recommendation.' 

(d) 

the following paragraph 4a is inserted: 

'4a.  Within the deadline of six month at most provided for in paragraph 4, 
the Member State concerned shall report to the Commission and the Council on 
action taken in response to the Council recommendation under Article 126(7) 
of  the  Treaty.  The  report  shall  include  the  targets  for  the  government 
expenditure and for the discretionary measures on the revenue side consistent 
with the Council recommendation under Article  126(7) of the Treaty,  as  well 

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as  information  on  the  measures  taken  and  the  nature  of  those  envisaged  to 
achieve the targets. The report shall be made public.' 

(e) 

paragraph 5 is replaced by the following: 

that 

recommendation, 

If effective action has been taken in compliance with a recommendation 
'5. 
under  Article  126(7)  of  the  Treaty  and  unexpected  adverse  economic  events 
with major unfavourable consequences for government finances occur after the 
adoption  of 
the  Council  may  decide,  on  a 
recommendation  from  the  Commission,  to  adopt  a  revised  recommendation 
under  Article  126(7)  of  the  Treaty.  The  revised  recommendation,  taking  into 
account the relevant factors mentioned in Article 2(3) of this Regulation, may 
notably  extend  the  deadline  for  the  correction  of  the  excessive  deficit  by  one 
year  as  a  rule.  The  Council  shall  assess  the  existence  of  unexpected  adverse 
economic  events  with  major  unfavourable  consequences  for  government 
finances  against  the  economic  forecasts  in  its  recommendation.  The  Council 
may  also  decide,  on  a  recommendation  from  the  Commission,  to  adopt  a 
revised recommendation under Article 126(7) of the Treaty in case of a severe 
economic downturn of a general nature.' 

4. 

in Article 4, paragraph 2 is replaced by the following: 

'2.  The  Council,  when  considering  whether  effective  action  has  been  taken  in 
response  to  its  recommendations  made  in  accordance  with  Article  126(7)  of  the 
Treaty,  shall  base  its  decision  on  the  report  submitted  by  the  Member  State 
concerned in accordance with Article 3(4a) of this Regulation and its implementation 
as  well  as  on  any  other  publicly  announced  decisions  by  the  Government  of  the 
Member State concerned.' 

5. 

Article 5 is amended as follows: 

(a) 

paragraph 1 is replaced by the following: 

'1. 
Any Council decision to give notice to the participating Member State 
concerned to take measures for the deficit reduction in accordance with Article 
126(9) of the Treaty shall be taken within two months of the Council decision 
establishing that no effective action has been taken in accordance with Article 
126(8). In the notice, the Council shall request that the Member State achieve 
annual  budgetary  targets  which,  on  the  basis  of  the  forecast  underpinning  the 
notice, are consistent with a minimum annual improvement of at least 0,5 % of 
GDP  as  a  benchmark,  in  its  cyclically  adjusted  balance  net  of  one-off  and 
temporary measures, in order to ensure the correction of the excessive deficit 
within the deadline set in the notice. The Council shall also indicate measures 
conducive to the achievement of these targets.' 

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12 

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(b) 

the following paragraph 1a is inserted: 

'1a. 
Following  the  Council  notice  given  in  accordance  with  Article  126(9) 
of the Treaty, the Member State concerned shall report to the Commission and 
the Council on action taken in response to the Council notice. The report shall 
include  the  targets  for  the  government  expenditure  and  for  the  discretionary 
measures on the revenue side as well as information on the actions being taken 
in response to the specific Council recommendations so as to allow the Council 
to  take,  if  necessary,  the  decision  in  accordance  with  Article  6  (2)  of  this 
Regulation. The report shall be made public.' 

(c) 

paragraph 2 is replaced by the following: 

'2. 
If  effective  action  has  been  taken  in  compliance  with  a  notice  under 
Article  126(9)  of  the  Treaty  and  unexpected  adverse  economic  events  with 
major  unfavourable  consequences  for  government  finances  occur  after  the 
adoption of that notice, the Council may decide, on a recommendation from the 
Commission, to adopt a revised notice under Article 126(9) of the Treaty. The 
revised  notice,  taking  into  account  the  relevant  factors  mentioned  in  Article 
2(3) of this Regulation, may notably extend the deadline for the correction of 
the  excessive  deficit  by  one  year  as  a  rule.  The  Council  shall  assess  the 
existence  of  unexpected  adverse  economic  events  with  major  unfavourable 
consequences  for  government  finances  against  the  economic  forecasts  in  its 
notice.  The  Council  may  also  decide,  on  a  recommendation  from  the 
Commission,  to  adopt  a  revised  notice  under  Article  126(9)  of  the  Treaty  in 
case of a severe economic downturn of a general nature.'  

6. 

Article 6 is replaced by the following: 

'Article 6 

1. 
The  Council,  when  considering  whether  effective  action  has  been  taken  in 
response  to  its  notice  made  in  accordance  with  Article  126(9)  of  the  Treaty,  shall 
base  its  decision  on  the  report  submitted  by  the  Member  State  concerned  in 
accordance to Article 5(1a) of this Regulation and its implementation as well as on 
any  other  publicly  announced  decisions  by  the  Government  of  the  Member  State 
concerned.  

2.  Where  the  conditions  to  apply  Article  126(11)  of  the  Treaty  are  met,  the 
Council  shall  impose  sanctions  in  accordance  with  Article  126  (11).  Any  such 
decision  shall  be  taken  no  later  than  four  months  after  the  Council  decision  giving 
notice to the participating Member State concerned to take measures in accordance 
with Article 126 (9).' 

7. 

in Article 7, the reference to 'Article 4(2) and (3) of Regulation (EC) No 3605/93' is 
replaced by the reference to 'Article 3(2) and (3) of Regulation (EC) No 479/2009'. 

EN 

13 

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8. 

Article 8 is replaced by the following: 

'Article 8 

Any  Council  decision  to  intensify  sanctions,  in  accordance  with  Article  126(11)  of 
the Treaty, shall be taken no later than two months after the reporting dates pursuant 
to Regulation (EC) No 479/2009. Any Council decision to abrogate some or all of its 
decisions in accordance with Article 126(12) of the Treaty shall be taken as soon as 
possible and in any case no later than two months after the reporting dates pursuant 
to Regulation (EC) No 479/2009.' 

9. 

in  the  third  paragraph  of  Article  9,  the  reference  to  'Article  6'  is  replaced  by  the 
reference to 'Article 6(2)'. 

10. 

Article 10 is amended as follows: 

(a) 

the introductory phrase of paragraph 1 is replaced by the following: 

'1. 
The  Commission  and 
implementation of action taken:' 

the  Council  shall  regularly  monitor 

the 

in paragraph 3, the reference to 'Regulation (EC) No 3605/93' is replaced by a 

(b) 
reference to 'Regulation (EC) No 479/2009'. 

11. 

Article 11 is replaced by the following: 

'Article 11 

Whenever the Council decides to apply sanctions to a participating Member State in 
accordance with Article 126(11) of the Treaty, a fine shall, as a rule, be required. The 
Council  may  decide  to  supplement  this  fine  by  the  other  measures  provided  for  in 
Article 126(11) of the Treaty.' 

12. 

Article 12 replaced by the following: 

'Article 12 

1. The amount of the fine shall comprise a fixed component equal to 0,2 % of GDP, 
and a variable component. The variable component shall amount to one tenth of the 
difference  between  the  deficit  as  a  percentage  of  GDP  in  the  preceding  year  and 
either  the  reference  value  for  government  deficit  or,  if  non  compliance  with 
budgetary discipline includes the debt criterion, the general government balance as a 
percentage of GDP that should have been achieved in the same year according to the 
notice issued under Article 126(9) of the Treaty.  

2. Each following year, until the decision on the existence of an excessive deficit is 
abrogated,  the  Council  shall  assess  whether  the  participating  Member  State 
concerned has taken effective action in response to the Council notice in accordance 
with Article 126(9) of the Treaty. In this annual assessment the Council shall decide, 
in  accordance  with  Article  126(11)  of  the  Treaty,  to  intensify  the  sanctions,  unless 
the  participating  Member  State  concerned  has  complied  with  the  Council  notice.  If 

EN 

14 

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an additional fine is decided, it shall be calculated in the same way as for the variable 
component of the fine in paragraph 1. 

3. Any single fine referred to in paragraphs 1 and 2 shall not exceed the upper limit 
of 0,5 % of GDP.' 

13. 

Article 13 is repealed and the reference to it in Article 15 is replaced by a reference 
to 'Article 12'. 

14. 

Article 16 is replaced by the following: 

'Article 16 

Fines  referred  to  in  Article  12  of  this  Regulation  shall  constitute  other  revenue 
referred to in Article 311 of the Treaty and shall be distributed among participating 
Member States which do not have excessive deficit as determined in accordance with 
Article 126(6) of the Treaty and which are not the subject of an excessive imbalance 
procedure within the meaning of Regulation (EU) No […/…], in proportion to their 
share in the total gross national income (GNI) of the eligible Member States.' 

15. 

16. 

All references to 'Article 104' are replaced throughout the Regulation by references 
to 'Article 126 of the Treaty'. 

In  point  2  of  the  Annex,  the  references  in  Column  I  to  '  Article  4  (2)  and  (3)  of 
Council Regulation (EC) No 3605/93' are replaced by references to 'Article 3(2) and 
(3) of Council Regulation (EC) No 479/2009'. 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 2 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at, 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

Regulation of the Council on speeding up and clarifying the implementation of the excessive 
deficit procedure. 

1.2. 

Policy area(s) concerned in the ABM/ABB structure6  

Economic and Financial Affairs 

1.3. 

Nature of the proposal/initiative  

(cid:133) The proposal/initiative relates to a new action  

(cid:133) The proposal/initiative relates to a new action following a pilot project/preparatory action7  

(cid:56) The proposal/initiative relates to the extension of an existing action  

(cid:133) The proposal/initiative relates to an action redirected towards a new action  

1.4. 

Objectives 

1.4.1.  The Commission's multiannual strategic objective(s) targeted by the proposal/initiative  

To foster EU growth, employment creation and sustainable development 

1.4.2. 

Specific objective(s) and ABM/ABB activity(ies) concerned  

Specific objectives: No.1 and 3. 

- To ensure effective policy co-ordination and overall policy consistency in developing an EU 
response  to  the  economic  crisis,  in  the  context  of  achieving  the  EU  2020  agenda  and 
sustainable development and in order to raise the growth potential of Member States and make 
the EU more competitive; 

-  To  promote  the  pursuit  by  Member  States  of  sound  budgetary  positions  and  of  public 
finances that are sustainable and of high quality in terms of their contribution to growth.  

ABM/ABB activity(ies) concerned 

Economic and Monetary Union 

6 
7 

ABM: Activity-Based Management – ABB: Activity-Based Budgeting. 
As referred to in Article 49(6)(a) or (b) of the Financial Regulation. 

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16 

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1.4.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

The  Commission's  Communication  COM(2010)367  emphasised  the  need  for  a  well  defined 
EU policy approach in order to (i) revigorate the economic recovery, (ii) put public finances 
back on a sound footing and (iii) actively promote sustainable growth and jobs.  

The proposed amendment of the regulation constituting the corrective arm of the Stability and 
Growth  Pact  (SGP)  forms  part  of  the  formal  legislative  proposals  announced  in  the 
abovementioned  Communication.  These  amendments  aim  at  strengthening  economic  policy 
coordination,  notably  by  addressing  the  need  for  an  effective  enforcement  of  economic 
surveillance of Member States' fiscal policies through appropriate incentives and sanctions and 
by putting an increased focus on public debt and fiscal sustainability.  

1.4.4. 

Indicators of results and impact  

Specify the indicators for monitoring implementation of the proposal/initiative. 

The achievement of the Commission's general objective of fostering EU growth, employment 
creation and sustainable development is measured through the following impact indicators: 

- the degree to which Member States record budgetary outturns in line with the SGP; 

- potential growth/output.  

The  achievement  of  the  specific  objective  #3  mentioned  above  is  measured  through  the 
following  result  indicator:  percentage  of  individual  Commission  recommendations  related  to 
the  Stability  and  Growth  Pact  (SGP)  implemented  by  Member  States  (contingent  upon  their 
adoption by the Council). 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term  

The legislative proposal constitutes part of the measures announced by the Commission in its 
Communication (2010)367 of 30 June 2010, which further develops the policy ideas set out in 
the  Commission's  Communication  COM(2010)250  of  12  May  2010  and  builds  on  the 
orientations agreed at the 17 June 2010 European Council. 

1.5.2.  Added value of EU involvement 

The coordination of Member States' economic policies form an integral part of the EU’s remit 
as reflected in Title VIII (on economic and monetary policy) of the Treaty on the Functioning 
of the European Union. 

1.5.3.  Lessons learned from similar experiences in the past 

Past experience has demonstrated that economic policy coordination needs to be enhanced and 
that notably the preventive and corrective arms of the SGP need to be strengthened. 

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17 

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1.5.4.  Coherence and possible synergy with other relevant instruments 

The legislative proposal constitutes one of the elements of a comprehensive economic reform 
package presented in Communication (2010)367 of 30 June 2010. 

1.6. 

Duration and financial impact  

(cid:133) Proposal/initiative of limited duration  

–  (cid:133) Proposal/initiative in effect from [DD/MM]YYYY to [DD/MM]YYYY  

–  (cid:133) Financial impact from YYYY to YYYY  

(cid:56) Proposal/initiative of unlimited duration 

–  Implementation with a start-up period from YYYY to YYYY, 

–  followed by full-scale operation. 

1.7.  Management mode(s) envisaged8  

(cid:56) Centralised direct management by the Commission  

(cid:133) Centralised indirect management with the delegation of implementation tasks to: 

–  (cid:133) executive agencies  

–  (cid:133) bodies set up by the Communities9  

–  (cid:133) national public-sector bodies/bodies with public-service mission  

–  (cid:133) persons entrusted with the implementation of specific actions pursuant to Title V of the 
Treaty  on  European  Union  and  identified  in  the  relevant  basic  act  within  the  meaning  of 
Article 49 of the Financial Regulation  

(cid:133) Shared management with the Member States  

(cid:133) Decentralised management with third countries  

(cid:133) Joint management with international organisations (to be specified) 

If more than one management mode is indicated, please provide details in the "Comments" section. 

Comments  

8 

9 

Details  of  management  modes  and  references  to  the  Financial  Regulation  may  be  found  on  the  BudgWeb  site: 
http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html 
As referred to in Article 185 of the Financial Regulation. 

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2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

Specify frequency and conditions. 

N/A 

2.2.  Management and control system  

2.2.1.  Risk(s) identified  

N/A 

2.2.2.  Control method(s) envisaged  

N/A 

2.3.  Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures. 

N/A 

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3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1. 

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget  line(s) 
affected  

The legislative proposal does not require any additional human or financial resources. 

•  Existing expenditure budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure

Contribution  

Number  
[Description………………………...……….] 

DA/NDA 
(10) 

from 
EFTA11 
countries 

from 
candidate 
countries12 

from third 
countries 

within the meaning 
of Article 18(1)(aa) 
of the Financial 
Regulation  

[XX.YY.YY.YY] 

DA/DN
A 

YES/N
O 

YES/N
O 

YES/N
O 

YES/NO 

•  New budget lines requested : None 

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of 
expenditure

Contribution  

Number  
[Heading……………………………………..] 

Diff./non-
diff. 

[XX.YY.YY.YY] 

from 
EFTA 
countries 

from 
candidate 
countries 

from third 
countries 

within the meaning 
of Article 18(1)(aa) 
of the Financial 
Regulation  

YES/N
O 

YES/N
O 

YES/N
O 

YES/NO 

Heading of 
multiannual 
financial 
framework 

Heading of 
multiannual 
financial 
framework 

10 
11 
12 

EN 

DA= Differentiated appropriations / DNA= Non-Differentiated Appropriations 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidate countries from the Western Balkans. 

20 

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3.2. 

Estimated impact on expenditure  

3.2.1. 

Summary of estimated impact on expenditure  

Heading of multiannual financial 
framework:  

Number 

[Heading 
……………...……………………………………………………………….] 

EUR million (to 3 decimal places) 

DG: <…….> 

(cid:121) Operational appropriations  

Number of budget line 

Number of budget line 

Appropriations 
of 
 from the envelop of specific programs14  
Number of budget line 

an 

administrative 

TOTAL appropriations 
for DG <…….> 

Year 
N13 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

Commitments 

Payments 

Commitments 

Payments 

(1) 

(2) 

(1a) 

(2a) 

nature 

financed 

N/A 

N/A 

N/A 

Commitments 

Payments 

(3) 

=1+1a 
+3 

=2+2a 

+3 

13 
14 

EN 

Year N is the year in which implementation of the proposal/initiative starts. 
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former "BA" lines), indirect research, direct 
research. 

21 

E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelop of specific programs  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADING <….> 
of the multiannual financial framework 

Commitments 

=4+ 6 

Payments 

=5+ 6 

If more than one heading is affected by the proposal / initiative: 

(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelop of specific programs  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADINGS 1 to 4 
of the multiannual financial framework 
(Reference amount) 

Commitments 

=4+ 6 

Payments 

=5+ 6 

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E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Heading of multiannual financial 
framework:  

5 

" Administrative expenditure " 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6)  

TOTAL 

EUR million (to 3 decimal places) 

DG: <…….> 

(cid:121) Human resources  
(cid:121) Other administrative expenditure  

TOTAL DG <…….> 

Appropriations  

TOTAL appropriations 
under HEADING 5 
of the multiannual financial framework  

(Total 
= Total payments) 

commitments 

Year 
N15 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

EUR million (to 3 decimal places) 

TOTAL appropriations  
under HEADINGS 1 to 5 
of the multiannual financial framework  

Commitments 

Payments 

15 

Year N is the year in which implementation of the proposal/initiative starts. 

EN 

23 

E

 
  
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.2.  Estimated impact on operational appropriations  

–  (cid:56) The proposal/initiative does not require the use of operational appropriations  

–  (cid:133) The proposal/initiative requires the use of operational appropriations, as explained below: 

Indicate 
objectives and 
outputs  

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as necessary to show 
the duration of the impact (see point 1.6) 

TOTAL 

OUTPUTS 

Commitment appropriations in EUR million (to 3 decimal places) 

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

Total 
numbe
r of 
ouputs 

Total  
cost 

(cid:216) 

Type 
of 
output
16 

Avera
ge 
cost  
of the 
ouput 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

SPECIFIC OBJECTIVE No 117… 

- Output 

- Output 

- Output 

Sub-total for specific objective N°1 

SPECIFIC OBJECTIVE No 2… 

- Output 

Sub-total for specific objective N°2 

TOTAL COST 

16 
17 

EN 

Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.). 
As described in Section 1.4.2. "Specific objective(s)…". 

24 

E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.  Estimated impact on appropriations of an administrative nature 

3.2.3.1.  Summary  

–  (cid:56) The  proposal/initiative  does  not 

require 

the  use  of  administrative 

appropriations  

–  (cid:133) The  proposal/initiative  requires  the  use  of  administrative  appropriations,  as 

explained below: 

EUR million (to 3 decimal places) 

Year 
N 18 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as necessary 
to show the duration of the impact 
(see point 1.6) 

TOTAL 

HEADING 5 
of the multiannual 
financial framework 

Human resources  

Other administrative 
expenditure  

Subtotal HEADING 5 
of the multiannual 
financial framework  

Outside HEADING 519 
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework  

18 
19 

Year N is the year in which implementation of the proposal/initiative starts. 
Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former "BA" lines), indirect research, direct research. 

EN 

25 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
TOTAL 

EN 

26 

   EN 

 
 
 
 
 
 
 
 
3.2.3.2.  Estimated requirements of human resources  

–  (cid:56) The proposal/initiative does not require the use of human resources  

–  (cid:133) The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below: 

Estimate to be expressed in full amounts (or at most to one decimal place) 

Year
N 

Year
N+1 

Year N+2 

Year N+3 

… enter 
as many 
years as 
necessary 
to show 
the 
duration 
of the 
impact 
(see point 
1.6) 

(cid:121) Establishment plan posts (officials and temporary agents) 

XX 01 01 01 (Headquarters and 
Commission’s Representation Offices) 

XX 01 01 02 (Delegations) 

XX 01 05 01 (Indirect research) 

10 01 05 01 (Direct research) 

(cid:121) External personnel (in Full Time Equivalent unit: FTE)20 

XX 01 02 01 (CA, INT, SNE from the 
"global envelope") 

XX 01 02 02 (CA, INT, JED, LA and SNE in 
the delegations) 

XX 01 04 yy 21 

- at Headquarters22 

- in delegations  

XX 01 05 02 (CA, INT, SNE - Indirect 
research) 

10 01 05 02 (CA, INT, SNE - Direct 
research) 

Other budget lines (specify) 

TOTAL 

XX is the policy area or budget title concerned. 

The human resources required will be met by staff from the DG who are already assigned to 
management of the action and/or have been redeployed within the DG, together if necessary 

20 

21 
22 

CA= Contract Agent; INT= agency staff ("Intérimaire"); JED= "Jeune Expert en Délégation" (Young 
Experts in Delegations); LA= Local Agent; SNE= Seconded National Expert;  
Under the ceiling for external personnel from operational appropriations (former "BA" lines). 
Essentially  for  Structural  Funds,  European  Agricultural  Fund  for  Rural  Development  (EAFRD)  and 
European Fisheries Fund (EFF). 

EN 

27 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
with any additional allocation which may be granted to the managing DG under the annual 
allocation procedure and in the light of budgetary constraints. 

Description of tasks to be carried out: 

Officials and temporary agents 

External personnel 

3.2.4.  Compatibility with the current multiannual financial framework  

–  (cid:56) Proposal/initiative is compatible the current multiannual financial framework. 

–  (cid:133) Proposal/initiative  will  entail  reprogramming  of  the  relevant  heading  in  the 

multiannual financial framework. 

Explain what reprogramming is required, specifying the budget lines concerned and the corresponding 
amounts. 

–  (cid:133) Proposal/initiative requires application of the flexibility instrument or revision 

of the multiannual financial framework23. 

Explain what is required, specifying the headings and budget lines concerned and the corresponding 
amounts. 

3.2.5.  Third-party contributions  

–  (cid:56) The proposal/initiative does not provide for co-financing by third parties  

–  (cid:133) The proposal/initiative provides for the co-financing estimated below: 

Appropriations in EUR million (to 3 decimal places) 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

Total 

Specify  the  co-financing 
body  

TOTAL appropriations 
cofinanced  

23 

See points 19 and 24 of the Interinstitutional Agreement. 

EN 

28 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.3. 

Estimated impact on revenue  

–  (cid:56) Proposal/initiative has no financial impact on revenue. 

–  (cid:133) Proposal/initiative has the following financial impact: 

– 

– 

(cid:133) 

(cid:133) 

on own resources  

on miscellaneous revenue  

Appropriation
s available for 
the ongoing 
budget 
exercise 

Budget revenue line: 

Article …………. 

EUR million (to 3 decimal places) 

Impact of the proposal/initiative24 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… insert as many columns as necessary 
in order to reflect the duration of the 
impact (see point 1.6) 

For miscellaneous assigned revenue, specify the budget expenditure line(s) affected. 

Specify the method for calculating the impact on revenue. 

24 

As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net 
amounts, i.e. gross amounts after deduction of 25% for collection costs. 

EN 

29 

   EN