DRAFT AMENDING BUDGET N°10 TO THE GENERAL BUDGET 2010 STATEMENT OF EXPENDITURE BY SECTION Section III - Commission
Date: 2010-10-20
Institutions: Directorate-General for Budget, European Commission
Subjects: amending budget, draft budget, financial aid, general budget

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EUROPEAN COMMISSION 

Brussels, 20.10.2010 
COM(2010) 598 final 

DRAFT AMENDING BUDGET N°10 
TO THE GENERAL BUDGET 2010 

STATEMENT OF EXPENDITURE BY SECTION 
Section III - Commission 

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DRAFT AMENDING BUDGET N°10 
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, 8/201011 and 9/201012. 

The  European  Commission  hereby  presents  to  the  budgetary  authority  the  Draft  Amending 
Budget No 10 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 
COM(2010) xxx 

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TABLE OF CONTENTS 

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

Increase in the Forecast of Revenue............................................................................. 4 

Revision of own resources ........................................................................................... 4 

Other revenue ............................................................................................................... 5 

Decrease in Payment Appropriations........................................................................... 5 

Heading 1a Competitiveness for Growth and Employment ........................................ 5 

Heading 1b Cohesion for Growth and Employment.................................................... 6 

Heading 2 Preservation and Management of Natural Resources................................. 6 

Heading 4 EU as a Global Player................................................................................. 7 

Modifications to Heading 1a...................................................................................... 10 

Creation of a new budget line .................................................................................... 10 

Reduction in commitment approrpriations................................................................. 10 

Preservation and Management of Natural Resources ................................................ 11 

Reduction in the estimates for agricultural expenditure ............................................ 11 

Reserve for Fisheries Agreements ............................................................................. 12 

EU Action Programme for Climate Change .............................................................. 12 

Type 2 European Schools........................................................................................... 12 

Introduction ................................................................................................................ 12 

Major events in the reform process............................................................................ 13 

EU contribution and request for 2010........................................................................ 13 

Origin of the Appropriations...................................................................................... 14 

Summary table by heading of the Financial Framework ........................................... 16 

1. 

2. 

2.1. 

2.2. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

4. 

4.1. 

4.2. 

5. 

5.1. 

5.2. 

5.3. 

6. 

6.1 

6.2 

6.3 

6.4 

7. 

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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1. 

INTRODUCTION 

Draft Amending Budget (DAB) No 10 for the year 2010 covers the following elements: 

–  a  net  increase  in  the  forecast  of  revenue  (EUR 466 million)  after  the  revision  of  the 

forecasts of own resources and other revenue; 

–  a  decrease  of  payment  appropriations  in  budget  lines  for  headings  1a,  1b,  2  and  4 
(EUR 755,6 million), after taking into account the redeployments proposed in the so-called 
"Global Transfer" rebalancing payments across budget lines to take account of progress in 
budget implementation thus far; 

–  the  creation  of  a  new  budget  item  06  04  14  04  for  the  financing  of  projects  in  areas  of 
energy  efficiency  and  energy  from  renewable  sources  under  the  European  Economic 
Recovery Plan;  

–  a  decrease  in  commitment  appropriations  of  EUR 15 million  for  some  measures  under 

heading 1a; 

–  a decrease in commitment and payment appropriations of EUR 330 million under heading 
2  on  the  budget  article  05 02 03  Refunds  on  non-Annex  1  products  and  on  the  budget 
article  05 02 12  Milk  and  milk  products,  and  a  further  reduction  of  EUR 28 million  in 
commitment  appropriations  and  EUR 5 million  in  payment  appropriations  from  the 
reserve; 

–  the  creation  of  budget  item  26  01  51  31  EU  contribution  to  the  so-called  "Type  2" 
European  Schools.  The  amount  of  EUR 4,83 million  in  commitment  and  payment 
appropriations  needed  for  2010  will  be  made  available  from  redeployment  within  policy 
area 26 Commission's administration. 

The overall consequence on expenditure is a reduction of EUR 373 million in commitments 
and EUR 1 090,6 million in payments. 

2. 

INCREASE IN THE FORECAST OF REVENUE 

2.1. 

Revision of own resources 

In accordance with Article 16 of Council Regulation (EC, Euratom) No 1150/2000 of 22 May 
200013, the Commission has revised the forecasts for own resources. This refers in particular 
to VAT (value added tax) and GNI (gross national income) balances and to traditional own 
resources. 

As  far  as  the  VATand  GNI  own  resources  balances  are  concerned,  and  on  the  basis  of  the 
available information, the Commission proposes to enter an amount of - EUR 627,9 million. 
This decrease relates to chapters 3114 and 3215 of the revenue side of the budget. 

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OJ L 130, 31.5.2000, p. 1.  
Balances  and  adjustment  of  balances  based  on  VAT  for  the  previous  financial  years  resulting  from 
application of article 10(4), (5) and (8) of Regulation (EC, EURATOM) No 1150/2000. 

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At this stage the calculations for Member States' balances are still provisional because of the 
on-going  verification  of  VAT  and  GNI  data.  This  may  lead  the  Commission  to  revise  the 
figures in the course of the procedure for this DAB.  

The  Commission  also  proposes  to  decrease  Traditional  Own  Resources  (TOR)  by 
EUR 100 million  in  chapter  1216  of  revenue.  If  new  data  for  the  last  quarter  of  the  year 
implies  significant  changes  to  this  estimation,  the  Commission  will  revise  its  figures  in  the 
course of the budgetary procedure. 

2.2. 

Other revenue 

Taking into account the amounts that at this stage of the year are cashed or will probably be 
cashed, it is proposed to increase the initial forecasts by a net amount of EUR 1 194 million. 
The detail by line is shown in the table below. 

Revenue lines 

Budget 2010 

DAB 10/2010 

New amount 

6 6 0 1 - Other non-assigned contributions and 
refunds 

7 0 0 0 - Interest due on late payments into the 
accounts held with the treasuries of the Member 
States 

7 0 1 - Interest on late payments and other interest on 
fines 

7 1 0 - Fines, periodic penalty payments and other 
penalties 

30 000 000

30 000 000 

60 000 000

5 000 000

8 000 000 

13 000 000

15 000 000

161 000 000 

176 000 000

100 000 000

995 000 000  1 095 000 000

Total 

150 000 000

1 194 000 000  1 344 000 000

3. 

DECREASE IN PAYMENT APPROPRIATIONS 

The  Commission  proposes  to  adjust  the  level  of  payment  appropriations  for  certain  budget 
lines in order to align them more closely to the latest estimates of needs and working on the 
assumption  that  the  rebalancing  of  payment  appropriations  between  budget  lines  requested 
separately  by  the  Commission  in  the  so-called  "Global  Transfer"  (DEC  53/2010)  will  be 
accepted  by  the  Budget  Authority.  The  proposed  reduction  in  the  level  of  payment 
appropriations  amounts  to  EUR 755,6 million.  The  sections  below  provide  the  justifications 
for the proposed reductions in the level of payments for the seventeen budget lines concerned.  

3.1. 

Heading 1a Competitiveness for Growth and Employment 

06 04 14 01 Energy projects to aid economic recovery – Energy networks (- EUR 34 million) 

Contrary  to  expectations,  some  beneficiaries  have  not  requested  pre-financing  payments 
because  certain  conditions  were  not  met,  e.g.  bank  guarantees,  environmental  permits  or  a 
formal  investment  decision.  Pre-financing  requirements  are  therefore  lower  than  expected. 

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Balances and adjustment of balances based on gross national income/product for the previous financial 
years  as  a  result  of  the  application  of  article  10(6)  to  (8)  of  Regulation  (EC,  EURATOM)  No 
1150/2000. 
Customs duties and other duties referred to in article 2(1)(a) of Decision 2007/436/EC. 

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This delay was already signalled in the Budget Forecast Alert information note in June17 and 
will not effect the overall implementation of the Recovery Plan. 

3.2. 

Heading 1b Cohesion for Growth and Employment 

19 08 02 02  Cross-border  cooperation 
 EUR 18,1 million) 

(CBC)  contribution 

from  Heading  1b 

(-

The lower than expected payment needs for the European Neighbourhood Policy Instrument 
(ENPI) CBC programmes are due to the fact that the finalisation of the calls for proposals and 
the signature of grant contracts have taken much longer than foreseen. This in turn has been 
caused  by  the  complex  nature  of  the  CBC  programmes  (participation  of  different  countries, 
involvement of the Joint Monitoring Committee in the selection process, political character of 
the  CBC  programmes)  and  the  innovative  character  of  the  calls  for  proposals  (the  standard 
procedures  of  the  Practical  Guide  to  contract  procedures  for  EC  external  actions  have  been 
adapted to a large extent to the specific needs of the participating countries).  

3.3. 

Heading 2 Preservation and Management of Natural Resources 

05 04 02 01 Completion  of  the  EAGGF,  Guidance  Section  -  Objective  1  regions  (2000  to 
2006) (- EUR 345,4 million) 

With regard to the EAGGF-Guidance section, the 2010 Draft Budget proposal was based on 
the hypothesis that the closure of programmes would start in 2009, and that payments would 
reach  up  to  50 %  of  outstanding  commitments.  However,  while  the  closure  of  programmes 
has already started in 2010, Member States have only been sending the closure documents at 
the very end of the deadline set up in the Regulation (31 of March 2010 for 40 programmes, 
and 30 of September 2010 for 106 others which have a 6-month extension to the final date of 
eligibility). Under these circumstances, the estimate of payment needs for the rest of the year 
have been revised downwards by EUR 345,4 million for Objective 1.  

11 06 12 European Fisheries Fund  (EFF) –  Convergence objective (- EUR 85,7 million) and 
11 06 13  European  Fisheries  Fund 
(-
 EUR 26,9 million) 

(EFF)  –  Outside  convergence  objective 

The  acceptance  of  the  Management  and  Control  Systems  for  operational  programmes 
representing almost 40% of the EFF is still pending and interim payments cannot be made for 
these programmes. In addition, the interim payments amount to less than foreseen for some 
operational  programmes  where  implementation  on  the  ground  is  lagging  behind.  It  is  also 
anticipated that various cost claims will arrive very late at the end of the year - too late for 
processing  the  payment  in  2010.  Finally,  problems  with  the  implementation  of  axis  1 
measures (for the adaptation of the Community fishing fleet), notably regarding concerns as 
to the compliance with the EFF provisions of public aid granted for temporary and permanent 
cessation in some Member States, have led to the interruption of the related interim payments. 

40 02 41 Reserve for Fisheries Agreements (- EUR 13 million) 

The  reserve  line  40 02 41  includes  appropriations  for  the  new  Fisheries  Agreements  which 
might be concluded with certain third countries. However, no new agreements will enter into 

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SEC(2010)767/2 

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force  before  31  December  2010.  In  consequence,  the  available  payment  appropriations  of 
EUR 13 million  are  not  needed.  This  also  implies  a  decrease  of  EUR 13 million  in 
commitments, which is recalled in section 5.2 below. 

3.4. 

Heading 4 EU as a Global Player 

04 06 01 Instrument  for Pre-Accession  Assistance  (IPA)  –  Human  resources  development  (-
 EUR 19 million) 

When  drawing  up  the  2010  budget  ,  the  payment  appropriations  entered  on  budget  article 
04 06 01 were calculated in order to secure a smooth implementation of IPA component IV 
(Human Resources Development Operational  Programme) taking into consideration that the 
process  of  conferral  of  management  took  much  longer  than  initially  foreseen  in  Candidate 
Countries. It also took into account the N+3 rule (art. 166 of the Financial Regulation) which 
may lead to a possible de-commitment of funds as early as the end of 2010 for Turkey and 
2011 for Croatia and Former Yugoslav Republic of Macedonia (FYROM). 

However, in the case of Turkey and of FYROM the level of expenditure incurred by and paid 
to  the  final  beneficiaries  and  certified  by  the  National  Authorising  Officer  will  still  be  far 
below the forecasts. 

In Turkey the preparations for the accreditation and conferral of decentralised management by 
the Turkish authorities took much longer than initially expected by the Turkish authorities. As 
a consequence, the Commission decision for conferral of decentralised management was only 
adopted  in  August  2009  and  the  Financing  Agreement  concerning  the  Human  Resources 
Development operational programme for Turkey was only concluded in September 2009. As 
a  consequence,  the  launching  of  calls  for  proposals  was  delayed  with  the  same  effect  on 
payments. 

For  FYROM  the  reasons  are  of  the  same  nature.  The  state  of  readiness  of  operations  to  be 
financed  under  the  Human  Resources  Development  Operational  Programme  remains 
insufficient  due  to  a  lack  of  administrative  capacity.  Even  though  progress  to  build  up  the 
administrative capacity was made in the first quarter of 2010, it is insufficient to make up for 
lost time and a lack of consumption of the available resources. 

05 05 01 01 The SAPARD pre-accession instrument – Completion of the programme (2000 to 
2006) (- EUR 78 million) 

In December 2009 the applications were submitted for the final balance of the three SAPARD 
programmes (Croatia, Romania and Bulgaria). The closure proceedings now underway have 
shown  that  no  new  payment  has  to  be  made,  and  that  the  closure  will  result  in  recoveries 
which  will  probably  be  settled  in  2011.  As  a  consequence,  the  payment  appropriations  of 
EUR 78 million entered in the 2010 budget will not be implemented.  

This  situation  is  explained  by  the  fact  that  payment  needs  for  2010  were  calculated  on  the 
basis  of  budgetary  commitments  outstanding  at  the  time  of  the  budget  preparation  in  early 
2009.  However,  the  interruption  of  payments  from  June  2008  to  September  2009,  and  the 
increase of controls that followed the implementation of the action plans by two beneficiary 
countries  (Romania  and  Bulgaria)  resulted  in  a  total  contracted  amount  significantly  below 
the budgetary commitments. The increase of controls also led to a volume of payments lower 
than the amounts of claims submitted by beneficiaries. 

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07 02 04 Preparatory  action  –  Environmental  monitoring  of  the  Black  Sea  Basin  and  a 
common  European  framework  programme  for  the  development  of  the  Black  Sea  region  (-
 EUR 1,7 million) 

This preparatory action was voted under the 2010 budget, and the Commission indicated that 
the appropriations voted would not be needed in their entirety to achieve the objective of the 
action.  Taking  into  account  the  need  to  build  on  existing  projects  and  the  results  of  the 
preceding pilot project, to avoid overlaps with ongoing or planned activities, and to consider 
the absorption capacity of possible implementing organisations in the region, the Commission 
estimated  that  possible  activities  for  2010  would  not  require  financial  resources  exceeding 
EUR 500 000. 

The financing decision adopted by the Commission (Decision C (2010)5759 of 25/08/2010) 
foresees  the  implementation  of  the  preparatory  action  by  way  of  grants  to  the  Black  Sea 
Commission and the OECD. Grant agreements are expected to be signed by November 2010 
and pre-financing payments for a maximum of EUR 300 000 will be made in December 2010. 
Therefore,  the  remaining  amount  of  payment  appropriations  (EUR 1,7 million)  are  not 
needed. 

13 05 01 01 Instrument for structural policies for pre-accession (ISPA) – Completion of other 
previous projects (2000 to 2006) (- EUR 3,7 million) 

The  budget  line  covers  completion  of  ISPA  pre-accession  assistance  for  Bulgaria,  Romania 
and  Croatia.  In  the  case  of  Bulgaria  and  Romania,  ISPA  is  managed  under  shared 
management  between  the  Commission  and  the  recipient  country,  under  the  Cohesion  Fund 
regulation. At the request of Bulgaria and Romania, an extension of the eligibility period of 
projects  can  be  granted  by  the  Commission  (Commission  Communication  SEC(2010)405 
dated 19 April 2010 on the guidelines for closure of Cohesion Fund and ISPA projects). Thus 
payment  claims  which  were  expected  in  2010  when  drawing  up  the  budget  will  not  be 
requested  and  will  be  postponed  (as  the  extensions  of  eligibility  are  taken  on  a  project  by 
project  basis,  the  end  of  eligibility  can  now  be  up  to  December  2012).  In  addition,  many 
projects experienced delays in their implementation mainly due to public procurement issues. 
After  consulting  the  concerned  Member  States,  the  forecast  of  payments  appropriations  for 
2010 was reduced by EUR 7,7 million, part of which (EUR 4 million) has been proposed for 
use in the Global Transfer, while the remaining amount (EUR 3,7 million) is included in this 
amending budget. 

19 09 02 Preparatory action – Cooperation with middle income countries in Latin America (-
 EUR 1,9 million) 

Payment  forecasts  under  this  budget  line  concern  four  running  Financing  Agreements, 
Uruguay  (plus  MERCOSUR  project),  Colombia  and  Nicaragua  (Panama  project).  The  full 
amount  for  the  action  EUR 3,5 million  was  already  contracted  in  previous  years,  and  it  is 
foreseen  to  pay  out  EUR 1,1 million  before  the  end  of  this  year.  The  remaining  amount  of 
EUR 1,9 million is consequently not needed in 2010. 

19 10 01 03  Preparatory  action  –  Business  and  scientific  exchanges  with  India  (-
 EUR 2,5 million) 

The combination of the nature of the action and initial difficulties in the implementation of the 
three contracts related to the Establishment of European Business and Technology Centres in 

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India (EBTC) have led to a reduction in the need for payments. Only two payments for a total 
amount of EUR 1,6 million will be further disbursed in 2010. 

20 02 01  External  trade  relations,  including  access  to  the  markets  of  non-EU  countries  (-
 EUR 2 million) 

This  line  covers  initiatives  related  to  new  multilateral  trade  negotiations  and  EU's  external 
trade policy, assistance in implementation of existing trade agreements, activities concerning 
the  EU's  market  access  strategy,  promotion  of  fair  trade  and  management  of  the  SIGL 
("Système  intégré  de  Gestion  de  Licences").  Some  open  calls  for  tender  are  currently  being 
concluded  (in  relation  to  the  functioning  and  evaluation  of  the  Market  Access  Database, 
evaluation  of  TDI  (Trade  Defence  Instrument)  measures,  and  the  ex-post  evaluation  of  the 
trade chapter of the EU-Chile Association Agreement); they are expected to be signed at the 
end  of  2010.  As  a  result,  the  deliverables  stemming  from  these  contracts,  as  well  as  the 
corresponding payments, are only foreseen in 2011. 

21 04 01 Environment and sustainable management of natural resources, including energy (-
 EUR 14 million) 

The  implementation  rate  of  the  Global  Energy  Efficiency  and  Renewable  Energy  Fund 
(GEEREF)  is  slower  than  initially  foreseen.  This  can  be  attributed  primarily  to  the  global 
financial crisis which affects investment funds in general. Therefore the payment of the 2010 
tranche of the contribution from the EU budget to GEEREF has to be postponed to 2011. 

21 05 01 07 Preparatory action – Research and development on poverty-related, tropical and 
neglected diseases (- EUR 1,5 million) 

Following a review of the initial forecast made in December 2009. The identification of a new 
action  in  the  domain  of  Research  and  Development  required  the  appropriate  expertise  and 
technical  discussions  with  the  World  Health  Organisation,  as  well  as  the  revision  of  draft 
proposals.  Given  the  very  time-consuming  nature  of  this  process,  the  new  commitment  is 
expected late in the year, with the corresponding pre-financing payment foreseen in 2011. 

22 02 01  Transition  and 
 EUR 54,6 million) 

institution-building  assistance 

to  candidate  countries 

(-

When  the  payment  forecasts  for  Turkey  were  made  for  the  2010  Draft  Budget,  certain 
difficulties  were  unforeseen,  i.e.  the  need  for  changes  to  the  technical  design  of  some 
submitted  projects,  the  additional  time  required  for  the  preparation  of  the  tender 
documentation for a number of projects, as well as the capacity limitations of administrative 
structures  (lack  of  dedicated  human  resources),  and  additional  unforeseen  workload  for  the 
Turkish  Implementing  Agency  for  component  I  (Transition  Assistance  and  Institution 
Building). 

22 02 02  Transition  and  institution-building  assistance  to  potential  candidate  countries  (-
 EUR 53,5 million) 

Some  projects  under  the  Instrument  for  Pre-accession  Assistance  (IPA)  2007  national 
programmes  have  been  delayed  and  needed  extensions  due  to  unforeseen  complexity  and 
technical  design  changes.  Contracting  and  implementation  by  the  national  authorities 
proceeded  at  a  slower  pace  than  initially  envisaged  and  thus  the  progress  in  contracting 
payments has been hampered. 

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The signatures of IPA 2008 and 2009 Financing Agreements have also been delayed by a few 
months in some countries because of the length of some specific national procedures. This has 
caused a chain reaction and has shifted forward the planned contracting/payments operations. 
Political  problems  and  lack  of  readiness  also  caused  major  postponement  of  projects  with 
International Financial Institutions. 

4. 

MODIFICATIONS TO HEADING 1A 

4.1. 

Creation of a new budget line 

In May 2010, the Commission proposed an amendment to Regulation (EC) 663/2009 to use 
the  uncommitted  funds  under  Chapter  II  of  the  EERP  Regulation  for  the  creation  of  a 
dedicated financial instrument to support energy efficiency and renewable initiatives. 

The  financial  facility  shall  support  the  development  of  bankable  energy  efficiency  and 
renewable energy projects and facilitate the financing of investments in energy efficiency and 
renewable  energy,  in  particular  in  urban  settings.  In  order  to  foster  a  large  number  of 
decentralised  investments,  municipal,  local  and  regional  public  authorities  will  be  the 
beneficiaries. In compliance with the EERP Regulation, the facility should be limited to the 
financing  of  measures  that  have  a  rapid,  measurable  and  substantial  impact  on  economic 
recovery within the EU, increased energy security and reduction of greenhouse gas emissions. 

This proposal is fully in line with the Declaration of the Commission referred to in Recital 7 
of  the  EERP  Regulation,  indicating  its  intention  to  propose  measures  allowing  for  the 
reallocation  of  uncommitted  funds  to  the  financing  of  projects  in  the  areas  of  energy 
efficiency and energy from renewable sources. 

The proposed amending Regulation is presently being examined by the European Parliament 
and the Council. 

Therefore, the Commission proposes the creation of a new budget item 06 04 14 04 - Energy 
projects to aid economic recovery - Energy efficiency and renewable initiatives. 

4.2. 

Reduction in commitment appropriations 

At  the  same  time,  the  commitment  appropriations  available  on  the  following  budget  items 
under heading 1a will be reduced: 

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Line 

Amount 
(million 
EUR) 

Explanation 

01 04 09 01 European Investment 
Fund – provision of paid-up shares of 
subscribed capital  
02 03 03 01 European Chemicals 
Agency – Contribution to Titles 1 
and 2 

02 03 03 02 European Chemicals 
Agency – Contribution to Title 3 
09 02 04 01 Body of European 
regulators for Electronic 
Communications (BEREC) – Office 
– Contribution to Titles 1 and 2  
09 02 04 02 Body of European 
regulators for Electronic 
Communications (BEREC) – Office 
– Contribution to Title 3  
14 04 02 Customs 2013  
14 05 03 Fiscalis 2013  

Total 

-0,99  The European Investment Fund capital increase has been 
achieved this year by the payment of the last instalment. 
Therefore, unused appropriations can be made available.  
The  2010  EU  budget  contribution  foreseen  for  the 
European Chemicals Agency will not be fully used as fee 
income from the REACH registration process is flowing 
into the Agency faster than expected. 

-4,4 

-2,65 

-2,1 

-0,86 

-2,0 
-2,0 

15,0 

The approval of the establishment plan for BEREC took 
longer  than  initially  foreseen  (amending  budget  No 
3/2010  was  finally  approved  on  7  September  2010), 
therefore  the  progress  towards  the  setting  up  of  the 
agency,  and  in  particular  in  recruitment  procedures,  was 
delayed.  This delay  will  prevent  the  full  implementation 
of the appropriations available on these lines. 

Appropriations  available  on  these  budget  items  will  not 
be fully used in 2010, due to lower than anticipated costs 
for external IT activities. 

5. 

PRESERVATION AND MANAGEMENT OF NATURAL RESOURCES 

5.1. 

Reduction in the estimates for agricultural expenditure 

The situation on the dairy market has significantly improved since the preparation of the 2010 
budget, and a total of EUR 280 million in both commitment and payment appropriations will 
be unused on the budget article 05 02 12 Milk and milk products, since there is much reduced 
need  for  market  intervention.  It  is  therefore  proposed  to  reduce  the  appropriations 
(commitments and payments) as follows: 

05 02 12 01 Refunds for milk and milk products 

- EUR 210 million 

05 02 12 02 Intervention storage of skimmed milk powder - EUR 20 million 

05 02 12 04 Intervention storage of butter and cream 

- EUR 50 million 

This reduction is to be seen in the context of the global evolution of these three budget lines. 
In the budget 2009, the level of appropriations for these 3 lines (which correspond to export 
refunds  and  storage)  was  EUR 26 million.  Due  to  the  milk  crisis  last  year,  intervention 
measures were activated and the budget lines were reinforced. Final implementation in 2009 
was EUR 268 million. In the 2010 budget, the Commission took the maximum precaution in 
order  to  be  sure  that  it  could  tackle  the  crisis  if  it  continued  during  the  year.  The  budget 
foreseen  for  these  lines  was  EUR 560 million  –  an  increase  on  2009  implementation. 
Fortunately  the  situation  on  the  dairy  market  improved  significantly.  Export  refunds  have 
been  stopped  at  the  end  of  2009,  and  the  Commission  is  selling  cautiously  the  stocks.  The 
price  of  fresh  milk  has  significantly  increased  and  the  price  of  dairy  products  such  as  the 
butter  or  milk  powder  is  significantly  above  the  intervention  level.  This  explains  why  a 
significant part of the budget 2010 is foreseen not to be used. 

EN 

11 

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The  amount  for  the  specific  milk  action  of  budget  2010  (EUR 300 million)  agreed  at  the 
conciliation has been implemented. 

In  addition  to  the  EUR 280 million  on  article  05 02 12,  it  is  foreseen  that  an  amount  of 
EUR 50 million  in  both  commitment  and  payment  appropriations  will  be  unused  on  the 
budget article 05 02 03 Refunds on non Annex-1 products. 

5.2. 

Reserve for Fisheries Agreements 

As  explained  in  section  3.3  above,  with  no  new  agreements  planned  before  31  December 
2010,  it  is  possible  to  reduce  commitment  and  payment  appropriations  on  budget  article 
40 02 41 Reserve for Fisheries Agreements by EUR 13 million. 

5.3. 

EU Action Programme for Climate Change 

In an amendment to the 2010 Draft Budget, the European Parliament created a budget article 
07 03 23 EU action programme to combat climate change with an amount of EUR 15 million 
in commitment appropriations and EUR 5 million in payment appropriations. These amounts 
were placed in reserve (40 02 41 01). The budgetary remarks stated that "this article is intend 
to contribute to the financing of the actions for mitigation and adaptation required within EU 
in  order  to  reach  the  objectives  agreed  at  the  Copenhagen  Climate  Change  Conference  in 
December 2009". 

In the absence of a legal base (article 49 of the Financial Regulation), the Commission was 
not  be  in  a  position  to  implement  the  appropriations  It  is  therefore  proposed  to  cancel  the 
expenditure for 2010. However, in the Draft Budget 2011, a similar action is proposed under 
the pilot project on Mainstreaming climate action and adaptation (budget article 07 13 03). 

6. 

TYPE 2 EUROPEAN SCHOOLS  

6.1 

Introduction 

The  System  of  the  European  Schools  (SEE)  functions  on  the  basis  of  an  Intergovernmental 
Convention18  of  which  the  European  Union  is  a  member.  The  European  Commission 
represents the EU within the Board of Governors (BoG), the body that controls the SEE. 

On 23 April 2009, the BoG concluded an overall agreement on the reform of the SEE. This 
reform started the process of opening up the system through the creation of so-called 'type 2' 
European Schools (EET2), i.e. schools belonging to the national system in a Member State, 
with one or more language sections capable of delivering the European Baccalaureate. These 
schools are normally located near a Union body, e.g. an institution, an agency or a research 
centre,  and  host  pupils  from  the  Member  State  where  the  school  is  located  as  well  as  the 
children of the Union personnel working there. 

For the right to issue the European Baccalaureate, the EET2 receive a particular accreditation 
from  the  BoG,  ensuring  that  they  satisfy  a  series  of  conditions  relating  to  the  teaching 
requirements  of  the  European  curriculum.  This  curriculum  and  the  European  Baccalaureate 
are explicitly mentioned in the Convention, in particular its articles 4 and 5. In its reform of 

18 

OJ L 212, 17.8.1994, p. 3-14. 

EN 

12 

   EN 

                                                 
April 2009, the BoG decided on the principle of granting a contribution from the EU budget to 
such accredited schools. This contribution should be proportional to the number of registered 
pupils of the Institutions attending these EET2. The reform decision also outlines the method 
of calculating the amount per pupil, taking into account the particularities of the SEE. 

The reform foresees, after the accreditation decision of a school by the BoG, the signature of 
an approval convention between the EET2 and the Secretariat-General of the EE (SGEE). On 
that basis, the Commission finally signs a contribution agreement with either the EET2 or the 
national public authority in charge of the school. 

Five  schools  received  an  accreditation  on  the European  schooling.  In  mid-August  2010,  the 
BoG gave accreditation to these five schools to become formally the first EET219. This will be 
ratified once the contribution agreements with the Commission have been signed. 

6.2 

Major events in the reform process 

The  main  steps  leading  to  the  overall  reform  agreement  of  April  2009  and  its  subsequent 
implementation are described below.  

The ministerial meeting of the BoG of November 2006 agreed on a number of key elements 
of  the  reform,  especially  on  the  principle  of  a  Union  contribution  to  the  accredited  national 
schools  proportional  to  the  number  of  registered  pupils  of  the  Union,  and  to  be  paid  either 
directly to the school or to the authority in charge of the school.  

On 16 November 2007 the BoG decided to include in the approval convention of each EET2 a 
clause on this Union contribution and its granting conditions. The Commission will sign this 
part and will therefore be able to ensure control of its implementation.  

On 23 April 2009 the BoG adopted the overall reform of the system as described above. 

On  14  October  2009  the  Commission  adopted  decision  C(2009)7719.  This  decision 
established  the  legal  base  for  the  EU  contribution  and  is  based  on  (i)  article  49.6.e  of  the 
Financial  Regulation  concerning  management  autonomy  of  the  Institutions  and  (ii)  the 
Convention. 

At  the  trilogue  of  15  October  2009  and  as  foreseen  in  point  47§2  of  the  Interinstitutional 
Agreement  on  budget  discipline  and  sound  financial  management20  of  2006,  the  budgetary 
authority  was  informed  by  the  Commission  about  the  creation  of  a  new  type  of  European 
school underlining the political urgency for the complete implementation of the reform after 
the overall agreement of April 2009. 

6.3 

EU contribution and request for 2010 

The  Commission  decision  of  14  October  2009  is  the  basis  for  the  application  of  the  EU 
contribution proportional to the number of registered pupils of the Union personnel attending 
schools  accredited  by  the  BoG.  This  concerns  children  of  members  of  the  EU  institutions, 
officials  under  the  statute,  other  servants  under  CEOS  (Conditions  of  Employment  of  other 

19 

20 

Parma school (accredited in July 2007), Dunshaughlin school (July 2007), Heraklion school (October 
2008), Helsinki school (January 2009) and Strasbourg school (first phase - 16/11/2009). 
OJ C 139, 14.6.2006, p. 1-17. 

EN 

13 

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Servants)  and  the  personnel  of  any  other  EU  body  set  up  by  the  EU  and  having  legal 
personality. 

The  contribution  is  in  force  as  from  the  school  year  2009-2010,  i.e.  September  2009.  Its 
estimated annual budgetary impact is about EUR 2,2 million for the coming years on the basis 
of the currently known situation. The final amount of the annual contribution depends on the 
number of children actually registered . 

The method of calculating the EU contribution to EET2 was approved by the BoG in January 
2009  and  formally  included  in  the  reform  agreement  of  April  2009.  This  method  describes 
how to establish the annual amount per pupil in primary and secondary section of an EET2. It 
takes into account not only the annual costs per pupil in the SEE and in the national system 
affected but also the number of language sections offered for the European curriculum in the 
EET2.  The  Commission,  using  the  latest  data  available  from  EUROSTAT  for  the  national 
systems and from its liaison unit to the SEE, updates these amounts annually. 

For the budget year 2010, the budget will have to cover the two school years 2009-2010 and 
2010-2011. The estimated impact will be therefore about EUR 4,83 million21, the amount for 
school year 2009-2010, could not be included into the Preliminary Draft Budget (PDB 2010) 
because the latter was adopted before the reform agreement. 

In its Draft Budget for 2011 the Commission included the creation of a specific budget line 
26 01 51 3122 and an amount of EUR 2,5 million to cover the needs for the school year 2011-
2012. A specific line is necessary to distinguish the EET2 contribution from the contribution 
to the other European Schools that continues to be financed from budget items 26 01 51 01 to 
26 01 51 28. 

This draft amending budget proposes the creation of a specific budget item 26 01 51 31 in the 
2010 budget and to allocate EUR 4,83 million to that new item. 

6.4 

Origin of the Appropriations 

The EUR 4,83 million to be allocated to budget item 26 01 51 31 will be made available by 
reducing  existing  appropriations  (commitments  and  payments)  of  heading  5  in  the  2010 
budget  for  which  the  needs  in  2010  are  lower  than  originally  estimated.  Globally,  the  total 
appropriations available to the Commission will not be modified. 

The following lines will be affected: 

21 

22 

Estimated  needs  for  school  years  2009-2010:  EUR 2,09 million  and  2010-2011:  EUR 2,74 million,  in 
total EUR 4,83 million. 
26 01 51 31 named "EU contribution to the type 2 European Schools" in the Commission's budget. 

EN 

14 

   EN 

                                                 
Line 

Amount 
(million EUR) 

Explanation 

26 01 11 01 Official Journal of 
the European Union 

26 01 50 04 Interinstitutional 
cooperation in the social sphere 
26 01 51 01 Office of the 
Secretary-General of the 
European Schools (Brussels) 

26 01 51 25 Alicante (ES) 
26 03 03 Erasmus public 
administration programme 

-2,08  A  new  contract  for  the  production  of  the  OJ  L&C  series 
came into force in 2009 and led to significant reduction in 
production  costs.  Consequently,  the  Commission  reduced 
its  budget  request  for  2010  (-29 %)  and  even  further  for 
2011  (-10 %).  Nevertheless,  the  savings  generated  by  the 
new contract in 2010 are greater than expected. 
In addition, the volume of pages produced is influenced by 
the  legislative  activity  and  turned  out  to  be  lower  than 
initially estimated. 

-0,75  Delays  in  signing  contracts  for  additional  places  in 

privately owned child care facilities (crèches). 

-0,6  Lower  expenditure  for  personnel  than  initially  estimated, 
and  due  to  reduced  number  of  missions,  meetings  and 
translation/interpretation needs of the Board of Governors 
and its various working groups. 

-0,4  Lower expenditure for personnel than initially estimated. 
-1,0  The  Commission  committed  about  EUR 1 million 

to 
implement  the  preparatory  action  as  follow-up  of  the  two 
pilot projects carried out in 2008 and 2009. 
However, it is not possible to run more than four two-week 
traineeships  without  compromising  the  quality  of  the 
reasons. 
programme  as  well  as 
Consequently,  EUR 1 million 
in 
payment  appropriations  will  not  be  used  for  the  intended 
purpose. 

in  commitment  and 

for  organisational 

Total 

-4,83 

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15 

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7. 

SUMMARY TABLE BY HEADING OF THE FINANCIAL FRAMEWORK 

Financial framework 
Heading/subheading 

2010 Financial framework 

CA 

PA 

Budget 2010 
(incl. AB 1-5/2010 and  
DAB 2, 3, 6, 8 and 9/2010 
CA 

PA 

DAB 10/2010 

Budget 2010 
(incl. AB 1-5/2010 and  
DAB 2, 3, 6, 8, 9 and 10/2010 

CA 

PA 

CA 

PA 

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

Total 
Margin23 

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 
Margin24   

4. EU AS A GLOBAL PLAYER25 

5. ADMINISTRATION26 

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

11 275 379 263

-15 000 000

-34 000 000

14 846 853 253

11 241 379 263 

49 387 592 092
64 249 445 345

-194 445 345  

36 371 862 500
47 647 241 763

-15 000 000

-18 100 000
-52 100 000

49 387 592 092
64 234 445 345

36 353 762 500 
47 595 141 763 

-179 445 345  

43 819 801 768

43 701 207 586

-330 000 000

-330 000 000

43 489 801 768

43 371 207 586 

59 498 833 302

58 135 640 809

-358 000 000

-806 000 000

59 140 833 302

57 329 640 809 

456 166 698  

814 166 698  

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
11 651 432 550

1 006 487 370
747 914 040
1 754 401 410

18 512 630  

738 570 370 
739 301 540 
1 477 871 910 

-232 539 617

8 160 182 000

7 555 155 566 

-373 000 000 -1 090 639 617

7 918 504 785
43 495 215
141 208 366 842
891 729 198

7 917 999 785 

121 875 809 833 
12 808 963 707 

23 

24 
25 
26 

EN 

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. 

16 

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EN 

17 

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