DRAFT AMENDING BUDGET N° 9 TO THE GENERAL BUDGET 2010 STATEMENT OF EXPENDITURE BY SECTION Section III - Commission
Date: 2010-10-13
Institutions: Directorate-General for Budget, European Commission
Subjects: amending budget, development aid, draft budget, financial aid, general budget, natural disaster

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EUROPEAN COMMISSION 

Brussels, 13.10.2010 
COM(2010) 577 final 

DRAFT AMENDING BUDGET N° 9 
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° 9 
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  (former  draft  amending  budget  No  2/20105  in  part) 
adopted on 7 September 2010, 

the amending budget 4/2010 (former draft amending budget No 5/20106) adopted on 
21 September 2010, 

the amending budget 5/2010 (former draft amending budget No 7/20107) adopted on 
22 September 2010, 

the draft amending budgets No 2/20108, 3/20109, 6/201010 and 8/201011. 

The  European  Commission  hereby  presents  to  the  budgetary  authority  the  Draft  Amending 
Budget No 9 to the 2010 budget. 

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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) 320 
COM(2010) 383 
COM(2010) 108 
COM(2010) 149 
COM(2010) 315 
COM(2010) 533 

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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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TABLE OF CONTENTS 

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

Mobilisation of the EU Solidarity Fund....................................................................... 4 

Madeira island - Portugal: Landslides and flooding .................................................... 4 

France: Storm Xynthia ................................................................................................. 5 

Financing...................................................................................................................... 8 

Summary table by heading of the Financial Framework ............................................. 9 

INTRODUCTION 

1. 

2. 

2.1. 

2.2. 

3. 

4. 

1. 

Draft Amending Budget (DAB) No 9 for the year 2010 covers the following elements: 

–  Mobilisation of the EU Solidarity Fund for an amount of EUR 66,9 million in commitment 
and  payment  appropriations  relating  to  the  effects  of  landslides  and  severe  flooding  on 
Madeira island – Portugal and the effects of Storm Xynthia in France. 

–  A  corresponding  reduction  in  payment  appropriations  of  EUR 66,9 million  from  the  line 
06 04 14 03 — Energy projects to aid economic recovery — European Offshore wind grid 
system. 

2. 

MOBILISATION OF THE EU SOLIDARITY FUND 

2.1.  Madeira island - Portugal: Landslides and flooding 

In  February  2010,  unusual  and  abnormal  intensity  of  rainfall  on  the  island  of  Madeira 
triggered landslides and severe flooding causing damage to public and private infrastructure, 
to businesses and agriculture. 

Subsequently,  Portugal  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 2012/200212 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 20 April 2010, within the deadline 
of  10  weeks  after  the  first  damage  was  recorded  on  20  February  2010.  Following  a 
request from the Commission services, further information necessary to complete the 
assessment of the application was provided on 15 July 2010. 

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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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(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

The disaster is of natural origin. The Portuguese authorities estimated the total direct 
damage  at  EUR 1.080 billion.  This  amount  represents  0,68 %  of  Portugal's  gross 
national income. 

As the estimated total direct damage exceeds the threshold of 0,6 % of GNI applicable 
to Portugal for mobilising the Solidarity Fund the disaster qualifies as a “major natural 
disaster”  and  falls  thus  within  the  main  field  of  application  of  Regulation 
(EC) No 2012/2002. Total direct damage is the basis for the calculation of the amount 
of  financial  assistance.  The  financial  assistance  may  only  be  used  for  essential 
emergency operations as defined in Article 3 of the Regulation. 

The floods have caused severe destruction and damage, most importantly in the field 
of  hydrology  with  an  estimated  total  of  130 km  of  waterways  on  rivers  and  smaller 
watercourses damaged representing 45 % of total damage. Roads and bridges, utility 
networks and infrastructures, private homes and property also suffered sever damage 
with some 800 houses concerned, half of which fully destroyed, and over 700 people 
having to be placed in temporary accommodation. Businesses and agriculture suffered 
some  EUR 122 million  direct  losses.  The  effects  of  the  flooding  were  particularly 
drastic  as  the  main  area  of  destruction  concerned  the  centre  of  Madeira's  capital 
Funchal where as a consequence of the cleaning-up operations of thousands of cubic 
meters  of  rubble  the  waterfront  has  to  be  entirely  rebuilt.  While  under  the  terms  of 
Regulation  (EC)  No 2012/2002  for  "major  disasters"  the  insularity  and  outermost 
situation  of  Madeira  is  not  a  criterion  of  its  own  this  can  however  not  be  neglected 
when considering the economic consequences of the disaster. 

The cost of operations eligible under Article 3(2) of Regulation (EC) No 2012/2002 is 
estimated  at  EUR 165,24 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. 

The  affected  region  is  eligible  as  "Phasing-in  Region"  under  the  Structural  Funds 
(2007-2013). The Portuguese authorities declared that they are exploring possibilities 
to finance a part of the reconstruction going beyond emergency operations through the 
relevant operational programmes co-financed by the Structural Funds. 

As  regards  coverage  of  eligible  damage  by  insurance,  the  Portuguese  authorities 
indicated  that  at  the  moment  of  application  they  had  no  possibility  to  determine  the 
possible  insurance  coverage  of  eligible  cost.  Should  any  insurance  coverage  exist, 
related operations would not be eligible for Solidarity Fund funding. 

In conclusion, for the reasons set out above, it is proposed to accept the application submitted 
by Portugal relating to the flooding disaster in Madeira in February 2010 as a “major disaster” 
and to propose the mobilisation of the Solidarity Fund. 

2.2. 

France: Storm Xynthia 

In February 2010, the major part of France was hit by storm Xynthia whereas the region on 
the Atlantic coast line, namely the departments of Charente-Maritime and Vendée, were most 
seriously affected. The storm killed 53 persons and injured nearly 80. It flooded widespread 

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areas  including  residential  areas  and  caused  severe  damage  to  dams  and  dykes,  public  and 
private infrastructure, to road and train networks, agriculture and businesses. 

Subsequently,  France  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 2012/200213 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 7 May 2010, within the deadline 
of 10 weeks after the first damage was recorded on 27 February 2010. On 24 June and 
on  20  July  the  French  authorities  presented  two  supplementary  dossiers  with  a  more 
refined damage evaluation and economic impact assessment of the disaster. 

(2) 

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

(3)  While the disaster concerned the major part of France with total damage estimated at 
EUR 2.4 billion the French authorities limited their application to the most hardly hit 
zone within two departments, Charente-Maritime and Vendee situated directly on the 
Atlantic coast. 

(4) 

(5) 

For the designated zone the French authorities estimate the total direct damage caused 
by  the  disaster  at  EUR 1 425,43 million.  This  amount  represents  41,12 %  of  the 
normal  threshold  for  mobilising  the  Solidarity  Fund  applicable  to  France  in  2010  of 
EUR 3 466,57 million  (i.e.  EUR 3  billion  in  2002  prices).  In  absolute  terms  it  is  the 
second  highest  amount  of  damage  of  all  Solidarity  Fund  applications  for  a  so-called 
regional disaster. 

As total damage remains below the normal threshold the application was examined on 
the  basis  of  the  criteria  for  so-called  “extraordinary  regional  disasters”  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 these criteria, 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  TFEU.  The  designated  region  does  not  fall  within  this 
category. The Regulation calls for "utmost rigour" in assessing applications presented 
under the "extraordinary regional disaster" criteria. 

(6) 

One  of  the  conditions  set  out  in  Regulation  (EC)  No  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 zone on which the French 
application is based comprises a coherent area of 46 municipalities on the coastline of 
the  departments  of  Charente-Maritime  and  Vendee.  In  addition,  the  zone  includes 

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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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(7) 

minor parts at infra-communal level of the urban poles of La Rochelle and Rochefort. 
101 336  inhabitants  live  within  the  designated  zone  and  are  claimed  to  have  been 
significantly concerned by the storm. The application describes the different ways in 
which the population was affected through personal damage, interruption of economic 
activities,  disruption  of  main  utilities  and  telecommunications,  interruption  of  traffic 
etc. Many houses were flooded and destroyed. Train, road and ferry connections were 
cut  off,  fixed  and  mobile  phone  lines  were  disrupted.  Dams,  coastal  defensive  lines 
and  infrastructure  were  severely  damaged.  Considerable  damage  to  farmland  and  to 
oyster production sites was reported. The information provided allows concluding that 
these phenomena concerned the major part of the population. 

As  regards  the  requirement  to  demonstrate  serious  and  lasting  repercussions  on  the 
living  conditions  and  the  economic  stability  of  the  region,  the  application  highlights 
the  destabilisation  of  agricultural  activities,  in  particular  through  the  long  term 
salinisation  effects  of  some  32 000  ha  of  farmland  flooded  by  sea  water  and 
subsequent  losses  in  harvests  over  several  years.  The  region's  oyster  and  mussel 
production,  the  most  important  in  France,  suffered  very  important  losses  with  some 
1050  producers  concerned,  many  of  which  are  at  risk  of  going  out  of  business.  The 
economically important tourism sector suffers from the damage caused to beaches and 
coastal  installations,  campgrounds  and  destroyed  mobile  homes  for  rent  and  fewer 
bookings.  It  is  expected  that  cumulated  losses  in  the  tourism  sector  will  exceed  one 
year's return. Reference is also made to a high feeling of insecurity and vulnerability 
of  the  resident  population  vis-à-vis  the  force  of  sea  in  particular  while  the  flood 
defences  have  not  yet  been  fully  restored.  The  necessity  to  renew  some  200  km  of 
flood defences will require important building works over several years. Moreover, the 
necessity for local authorities to invest in flood-related operations will greatly impact 
on  their  finances  with  negative  consequences  for  other  services  to  the  population. 
Overall,  the  main  sectors  of  the  regional  economy,  tourism,  agriculture  and  oyster 
production,  are  clearly  suffering  from  the  effects  of  the  storm.  Even  though  the  two 
economic  centres  in  the  region,  the  cities  of  La  Rochelle  and  Rochefort  suffered 
relatively little from the storm they are of only limited importance for the economy of 
the  rural  hinterland  and  will  not  be  able  to  compensate  the  before  mentioned 
destabilising factors. 

(8) 

The cost of operations eligible under Article 3(2) of Regulation (EC) No 2012/2002 is 
estimated  at  EUR 473,842 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  D)  cleaning  up  of  disaster  stricken 
areas/zones. 

(9) 

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

(10)  The French authorities indicated that there is no insurance coverage of eligible cost. 

In conclusion, for the reasons set out above, it is proposed to accept the application submitted 
by  France  relating  to  the  disaster  created  by  storm  Xynthia  as  an  “extraordinary  regional 
disaster” and to propose the mobilisation of the Solidarity Fund. 

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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 
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  these  cases  and  to  grant  the  following  aid 
amounts: 

Direct damage 

Threshold 

Amount based 
on 2,5 % 

Amount based  
on 6 % 

1 080 000 000 

958 406 000 

23 960 150 

7 295 640 

(EUR) 
Total amount of 
aid proposed 

31 255 790 

(EUR) 

Direct damage 

Threshold 

Amount based on 
2,5 % 

Amount based  
on 6 % 

Total amount of
aid proposed 

1 425 430 000 

3 466 573 000 

35 635 750 

- 

35 635 750 

Portugal – 
Madeira 
flooding 2010 
Total 

France - Storm 
Xynthia 2010 
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  06 04 14 03:  Energy  projects  to  aid 
economic  recovery  —  European  Offshore  wind  grid  system  are  such  that  payment 
appropriations  of  EUR 66 891 540  may  be  reallocated  to  budget  line  13 06 01  to  cover  the 
corresponding needs related to the mobilisation of the EU Solidarity Fund. This situation on 
budget  item  06 04 14 03  was  already  announced  in  the  Budget  Forecast  Alert  information 
note  of  June  201014,  and  will  not  have  an  effect  on  the  final  implementation  of  the 
programme. 

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SEC(2010)767/2 

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4. 

SUMMARY TABLE BY HEADING OF THE FINANCIAL FRAMEWORK 

Financial framework 
Heading/subheading 

2010 Financial framework 

CA 

PA 

Budget 2010 
(incl. DAB 1 to 8/2010) 
PA 
CA 

DAB 9/2010 

CA 

PA 

Budget 2010 
(incl. DAB 1 to 9/2010) 
PA 
CA 

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

Total 
Margin15 

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 
Margin16   

4. EU AS A GLOBAL PLAYER17 

5. ADMINISTRATION18 

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

-66 891 540

14 861 853 253

11 275 379 263 

49 387 592 092
64 249 445 345

-194 445 345  

36 371 862 500
47 714 133 303

-66 891 540

49 387 592 092
64 249 445 345

36 371 862 500 
47 647 241 763 

-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
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

+66 891 540
+66 891 540

+66 891 540
+66 891 540

+66 891 540

0

1 006 487 370
747 914 040
1 754 401 410

18 512 630  

8 160 182 000
-18 300 000
7 918 504 785
43 495 215
141 581 366 842
518 729 198

738 570 370 
739 301 540 
1 477 871 910 

7 787 695 183 

7 917 999 785 

122 966 449 450 
11 718 324 090 

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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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