DRAFT AMENDING BUDGET N° 7 TO THE GENERAL BUDGET 2014 GENERAL STATEMENT OF REVENUE STATEMENT OF EXPENDITURE BY SECTION Section III – Commission
Date: 2014-10-17
Institutions: European Commission
Subjects: Bulgaria, Croatia, Serbia, aid to disaster victims, amending budget, commitment of expenditure, draft budget (EU), emergency aid, flood, fund (EU), payment appropriation













EUR-Lex - 52014DC0650 - EN











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52014DC0650

DRAFT AMENDING BUDGET N° 7 TO THE GENERAL BUDGET 2014 GENERAL STATEMENT OF REVENUE STATEMENT OF EXPENDITURE BY SECTION Section III – Commission /* COM/2014/0650 final - 2014/ () */









DRAFT AMENDING BUDGET N° 7
TO THE GENERAL BUDGET 2014
GENERAL STATEMENT OF REVENUE
STATEMENT OF EXPENDITURE BY SECTION
Section III – Commission

Having regard to:
–                        
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 Regulation (EU, Euratom) No 966/2012 of the
European Parliament and of the Council of 25 October 2012 on the Financial
Regulation applicable to the general budget of the Union[1], and in particular
Article 41 thereof,
–                        
the Council Regulation (EU, Euratom) No
1311/2013 of 2 December 2013 laying down the multiannual financial framework
for the years 2014-2020[2],
and in particular Article 13 thereof,
–                        
the general budget of the European Union for the
financial year 2014 adopted on 20 November 2013[3],
–                        
the amending budget No 1/2014[4], adopted on 16 April
2014,
–                        
the draft amending budget No 2/2014[5], adopted on 15 April
2014,
–                        
the draft amending budget No 3/2014[6], adopted on 28 May 2014,
–                        
the draft amending budget No 4/2014[7], adopted on 9 July
2014, as amended on 16 October 2014[8],
–                        
the draft amending budget No 5/2014[9], adopted on 8 September
2014,
–                        
the draft amending budget No 6/2014[10], adopted on 17 October
2014,
The European
Commission hereby presents to the budgetary authority the draft amending budget
No 7 to the 2014 budget.
CHANGES TO
THE STATEMENT OF REVENUE AND EXPENDITURE BY SECTION
The changes to
the statement of revenue and expenditure by section are available on EUR-Lex (http://eur-lex.europa.eu/budget/www/index-en.htm). An
English version of the changes to this statement is attached for information as
a budgetary annex.
TABLE OF
CONTENT
1.       Introduction.. 3
2.       Mobilisation of the EU Solidarity
Fund.. 3
2.1     Serbia – Floods. 3
2.2     Croatia – Floods. 4
2.3     Bulgaria – Floods. 5
3.       Financing.. 6
4.       Summary table by MFF heading.. 8
1.           Introduction
Draft Amending Budget
(DAB) No 7 for the year 2014 covers the mobilisation of the EU Solidarity Fund
for an amount of EUR 79 726 440 in commitment and payment
appropriations. The mobilisation relates to floods in Serbia and Croatia in May 2014 and to floods in Bulgaria in June 2014.
2.           Mobilisation of the EU Solidarity
Fund
During the month
of May 2014, severe weather hit major parts of the Republic of Serbia and to a lesser degree Croatia, leading to some of the worst floods in living memory,
causing massive destruction of public and private infrastructure, as well as
damaging hundreds of thousands of households. A month later, intense and heavy
rainfall exceeding up to four times the monthly climatic norms affected parts
of the Republic of Bulgaria leading to serious flooding and disruption.
The Commission has carried
out a thorough examination of all three applications in accordance with Council
Regulation (EC) No 2012/2002 establishing the European Union Solidarity Fund[11]  as amended by Regulation (EU) No 661/2014 of the European
Parliament and of the Council[12]  (hereafter "the Regulation"),and in particular with
Articles 2, 3 and 4 thereof.
The most important
elements of the assessments are summarised here below.
2.1         Serbia – Floods
(1)              
Major parts of Serbia   were affected by severe
weather conditions during May 2014, leading to some of the worst floods in
living memory that caused massive destruction of public and private
infrastructure, as well as damaging hundreds of thousands of households.
(2)              
The application from Serbia, an eligible State
within the meaning of Article (2)1 of the Regulation, was received on 30 July
2014, within the deadline of 12 weeks after the first damage was recorded on 14
May 2014. Updated information was provided on 18 August 2014.
(3)              
The flooding is of natural origin and therefore
falls within the field of application of the Solidarity Fund.
(4)              
The Serbian authorities estimate the total
direct damage caused by the disaster at EUR 1,1 billion. It is based
on the results of the Recovery Needs Assessment carried out with the
participation of the EU and international organisations in the immediate
aftermath of the disaster. This amount represents 3,8 % of Serbia’s GNI
and exceeds the threshold for mobilising the Solidarity Fund of EUR 174,7 million
applicable to Serbia in 2014 (i.e. 0,6 % of GNI based on 2012 data). As
the estimated total direct damage exceeds the threshold the disaster qualifies
as a “major natural disaster”, according to Article 2(2) of the Regulation. The
financial assistance may only be used for essential emergency and recovery operations
as defined in Article 3 of the Regulation.
(5)              
As regards the impact and consequences of the
disaster, the Serbian authorities report widespread catastrophic flooding
accompanied by torrents, erosion and landslides, mainly on the rivers Sava, Kolubara, the Tamnava, Jadar, Zapadna Morava, Velika Morava, Mlava and Pek including
their tributaries. The floods most severely affected the districts of Kolubara,
Mačva, Moravicki, Pomoravlje, and part of Belgrade. The affected
municipalities have a population of some 1,6 million inhabitants, of which
180 000 required assistance. There were 60 casualties. Almost 32 000
people were rescued from the affected areas by the emergency services, around
5 000 of which needed to be placed in temporary accommodation. 485 housing
units were destroyed, some 16 200 apartments and individual housing units
sustained damage. The open pit mines of Tamnava West Field, Veliki Crljeni, as
well parts of the Kolubara coal basin were flooded. These coal mines are
producing the coal for the major power plant “Nikola Tesla A” in Obrenovac
which generates about 63 % of the electricity for the whole country. In
most of the affected municipalities the water supply was disrupted for up to 10
days and partly remains polluted. Moreover, the floods affected health
facilities, schools, and the road and rail networks and caused serious harm to
the environment. The floods are estimated to have caused damage equivalent to
2,7 % of GDP and up to 2 % of GDP in economic losses in 2014 alone.
The hardest hit economic sectors are energy, mining, and agriculture but
significant damages were also inflicted on transport infrastructure (roads,
bridges and railways), as well as on numerous facilities for flood and coastal
protection.
(6)              
In addition to the mobilisation of all
available national forces, international humanitarian and civil protection assistance
was requested bilaterally and multilaterally. On the EU
side assistance was provided from Germany, Slovenia, Bulgaria,
Austria, Czech Republic, France, Denmark, Romania, Spain, the Netherlands and
Poland coordinated through the European Union Civil Protection Mechanism. International teams for flood rescue operations as well as high
capacity pumping were deployed. The European Commission also allocated an amount of
EUR 3 million for humanitarian assistance in both Bosnia-Herzegovina
and Serbia, to address the immediate needs of the most vulnerable people
affected by the disaster, providing food and non-food items, cash and vouchers,
pipelines and sanitary equipment.
(7)              
The cost of essential emergency operations eligible
under Article 3(2) of the Regulation, has been estimated by the Serbian
authorities at EUR 381,9 million and has been broken down by type of
operation.  The largest share of the cost of emergency operations (over EUR 202 million)
concerns recovery operations in the field of energy. The second largest share
of cost concerns the transport sector amounting to EUR 106 million.
(8)              
Under the Instrument for Pre-accession
Assistance (IPA) EUR 30 million has already been reallocated to
support short term recovery efforts. An additional EUR 50 million
will be allocated by the end of the year to further support floods recovery and
reconstruction. Funds under the cross-border cooperation component of IPA will
be used to support border areas between Serbia and Bosnia-Herzegovina for a
total amount of EUR 4 million. Moreover, the International Donors’
Conference, held in Brussels on 16 July, resulted in pledges from States,
international organisations and the private sector amounting to over EUR 986 million
for Serbia, of which EUR 106,8 million as grants, the rest as loans.
In addition, more than EUR 41 million was pledged for cross-border
activities.
(9)              
The Serbian authorities did not indicate any
insurance coverage of eligible cost.
2.2         Croatia – Floods
(1)              
The east part of Croatia was affected by the
same weather conditions that affected Serbia, causing serious damage, albeit to
a lesser degree.
(2)              
The application from Croatia was received on 31
July 2014, within the deadline of 12 weeks after the first damage was recorded
on 17 May 2014.
(3)              
The flooding is of natural origin and therefore
falls within the field of application of the Solidarity Fund.
(4)              
The Croatian authorities estimate the total
direct damage caused by the disaster at EUR 297,6 million. This
amount represents 0,7 % of Croatia’s GNI and exceeds the threshold for
mobilising the Solidarity Fund of EUR 254,2 million applicable to
Croatia in 2014 (i.e. 0,6 % of GNI based on 2012 data). As the estimated
total direct damage exceeds the threshold the disaster qualifies as a “major
natural disaster”, according to Article 2(2) of the Regulation. The financial
assistance may only be used for essential emergency and recovery operations as
defined in Article 3 of the Regulation.
(5)              
As regards the impact and consequences of the
disaster, the Croatian authorities report that the floods affected five counties
in the Sava river basin located in the East of the country: Osijek-Baranja,
Vukovar-Srijem, Brod-Posavina, Požega-Slavonija and Sisak-Moslavina. Water
levels partly exceeded the highest ever recorded, and qualified as a once in a
1000-year flood. The flood caused considerable damage to residential,
commercial, communal and infrastructure facilities, as well as to agricultural
crops and livestock. Over 26 000 people had to be evacuated. Energy
networks failed, roads and bridges were seriously damaged and/or buried in landslides
or washed-up mud. Some 2 700 residential buildings and over 4 000
farm buildings were flooded, many of which suffered structural damage.
(6)              
The cost of essential emergency and recovery operations
eligible under Article 3(2) of the Regulation, has been estimated by the
Croatian authorities at EUR 108,8 million and has been broken down by
type of operation. The largest share of the cost of emergency operations (over
EUR 38 million) concerns the restoration of transport infrastructure.
The second largest share of cost concerns rescue services amounting to
EUR 24,7 million.
(7)              
The affected regions fall under the category of
"less developed regions" under the European Structural and Investment
Funds (2014-2020). The Croatian authorities have not signalled to the
Commission their intention to reallocate funding from the ESI Fund programme
for Croatia towards recovery measures. The EU Civil Protection Mechanism was
activated to assist with insecticides for mosquito spraying.
(8)              
As regards the implementation of Union
legislation on disaster risk prevention and management related to the nature of
the disaster Croatia is in the process of implementing Directive 2007/60/EC of
the European Parliament and of the Council of 23 October 2007 on the assessment
and management of flood risks (the “Floods Directive”)[13]. Preliminary flood risk assessments have been carried out. Flood
hazard maps and flood risk maps were established for two pilot areas and are in
progress for other areas. Flood risk management plans are in the preparatory
phase but have not yet been established. 
(9)              
At the date of submitting the application Croatia was not subject to infringement proceedings concerning Union legislation relating
to the nature of the disaster.
(10)          
The Croatian authorities indicated that there is
no insurance coverage of eligible cost.
2.3         Bulgaria – Floods
(1)              
A month later, some areas in Bulgaria were affected by intense and heavy rainfall exceeding up to four times the monthly
climatic norms leading to serious flooding and disruption.
(2)              
The application from Bulgaria was received on 25
August 2014, within the deadline of 12 weeks after the first damage was
recorded on 19 June 2014. On 12 September 2014 the Bulgarian authorities
submitted updated information.
(3)              
The flooding is of natural origin and therefore
falls within the field of application of the Solidarity Fund.
(4)              
The Bulgarian authorities estimate the total
direct damage caused by the disaster at EUR 311,3 million. This
amount represents 0,8 % of Bulgaria’s GNI and exceeds the threshold for
mobilising the Solidarity Fund of EUR 232,5 million applicable to
Bulgaria in 2014 (i.e. 0,6 % of GNI based on 2012 data). As the estimated
total direct damage exceeds the threshold the disaster qualifies as a “major
natural disaster”, according to Article 2(2) of the Regulation. The financial
assistance may only be used for essential emergency and recovery operations as
defined in Article 3 of the Regulation.
(5)              
As regards the impact and consequences of the
disaster, the Bulgarian authorities report that from 19 June 2014, as a result
of severe weather, numerous towns and villages in Bulgaria were significantly
affected by flooding, in particular in the Eastern, North-Eastern and Central
parts of the country. The regions of Varna, Dobrich, Gabrovo, Veliko Tarnovo, Burgas, Montana, Kyustendil, Plovdiv, Haskovo, Yambol and the Sofia-region suffered most
of the damage. In the coastal municipality of Asparuhovo (Varna) heavy rainfall
and a tidal wave destroyed houses and farms, flooded buildings and streets and
destroyed cars. Electricity and communication networks throughout the region
were disrupted. Flash floods, bursting rivers and landslides caused casualties
and severe damage in the Severen tsentralen and Severoiztochen regions. Fifteen casualties were
reported, thousands were directly affected and hundreds had to be evacuated and
provided with temporary accommodation. There was damage to public
infrastructure and facilities in the areas of energy, water and water
resources, telecommunications, transport, health, education, emergency
services, cultural heritage and protected natural areas. Abundant deposits of
washed up soil and waste, sewerage overflow and discharge of waste water have
worsened the living conditions in the affected areas. As a result of the
flooding landslides and erosion processes have been activated.
(6)              
The cost of essential emergency and recovery operations
eligible under Article 3(2) of the Regulation, has been estimated by the
Bulgarian authorities at EUR 285,4 million and has been broken down
by type of operation. The largest share of the cost of emergency operations
(over EUR 87 million) concerns the securing of preventive
infrastructures. Over 70 million are estimated to be required for the
restoration of transport infrastructure.
(7)              
The affected regions fall under the category of
"less developed regions" under the European Structural and Investment
Funds (2014-2020). The Bulgarian authorities have not signalled to the
Commission their intention to reallocate funding from the ESI Fund programme
for Bulgaria towards recovery measures. No request for assistance through the
EU Civil Protection Mechanism was made.
(8)              
As regards the implementation of Union
legislation on disaster risk prevention and management related to the nature of
the disaster Bulgaria has transposed Directive
2007/60/EC of the European Parliament and of the Council of 23 October 2007 on
the assessment and management of flood risks (the “Floods Directive”) in 2010
into national law and a preliminary flood risk assessment for each river basin
district has been conducted based on a methodology for flood risk and flood
hazard assessment developed by the Ministry of Environment and Water.
(9)              
At the date of submitting the application Bulgaria was not subject to infringement proceedings concerning Union legislation relating
to the nature of the disaster.
(10)          
The Bulgarian authorities indicated that damage
amounting to some EUR 2,3 million in the health sector is covered by
insurance. This amount was deducted from eligible cost.
3.           Financing
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 (i.e. 0,6 % of 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 and 6 % for the part of the damage 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 and to grant the following
aid amounts:
 Disaster || Direct damage (million EUR) || Major disaster threshold (million EUR) || Total cost of eligible operations (million EUR) || 2.5% of direct damage up to threshold (EUR) || 6% of direct damage above threshold (EUR) || Capping applied || Total amount of aid proposed (EUR) 
 Serbia || 1 105,622 || 174,649 || 381,967 || 4 366 225 || 55 858 380 || no || 60 224 605 
 Croatia || 297,629 || 254,229 || 108,799 || 6 355 725 || 2 604 000 || no || 8 959 725 
 Bulgaria || 311,328 || 232,502 || 285,440 || 5 812 550 || 4 729 560 || no || 10 542 110 
 TOTAL ||   || 79 726 440 
This is the second proposal for mobilisation decision of 2014, and the
total amount of aid proposed above complies with the provisions of the
Multi-Annual Financial Framework (MFF) regulation foreseeing a total amount of
EUR 530,6 million (EUR 500 million in 2011 prices).
In conclusion, it is proposed to mobilise the Solidarity Fund for each of
these cases and to enter the total appropriations for Croatia and Bulgaria of
EUR 19 501 835 into budget 2014 on budget article
13 06 01 and the corresponding appropriations of
EUR 60 224 605 for Serbia on budget article 13 06 02
(dedicated to accession countries), both in commitment and in payment
appropriations.
As the Solidarity Fund is a special instrument as defined in the MFF
regulation, the corresponding appropriations should be budgeted outside the
corresponding MFF ceilings.
4.           Summary
table by MFF heading
 Heading || Budget 2014 (incl. AB 1 and DAB 2-6/2014) || Draft Amending Budget 7/2014 || Budget 2014 (incl. AB 1 and DAB 2-7/2014) 
 CA || PA || CA || PA || CA || PA 
 1. || Smart and inclusive growth || 63 986 340 779 || 66 374 487 058 ||   ||   || 63 986 340 779 || 66 374 487 058 
 Ceiling || 63 973 000 000 ||   ||   ||   || 63 973 000 000 ||   
 Margin || 75 989 221 ||   ||   ||   || 75 989 221 ||   
 1a || Competitiveness for growth and jobs || 16 484 010 779 || 12 028 322 326 ||   ||   || 16 484 010 779 || 12 028 322 326 
 Ceiling || 16 560 000 000 ||   ||   ||   || 16 560 000 000 ||   
 Margin || 75 989 221 ||   ||   ||   || 75 989 221 ||   
 1b || Economic  social and territorial cohesion || 47 502 330 000 || 54 346 164 732 ||   ||   || 47 502 330 000 || 54 346 164 732 
 Ceiling || 47 413 000 000 ||   ||   ||   || 47 413 000 000 ||   
 Margin || -89 330 000 ||   ||   ||   || -89 330 000 ||   
 Flexibility Instrument || 89 330 000 ||   ||   ||   || 89 330 000 ||   
 Margin || 0 ||   ||   ||   || 0 ||   
 2. || Sustainable growth: natural resources || 59 190 929 284 || 56 558 779 469 ||   ||   || 59 190 929 284 || 56 558 779 469 
 Ceiling || 59 303 000 000 ||   ||   ||   || 59 303 000 000 ||   
 Margin || 112 070 716 ||   ||   ||   || 112 070 716 ||   
 Of which: European Agricultural Guarantee Fund (EAGF) — Market related expenditure and direct payments || 43 778 100 000 || 43 776 956 403 ||   ||   || 43 778 100 000 || 43 776 956 403 
 Sub-ceiling || 44 130 000 000 ||   ||   ||   || 44 130 000 000 ||   
 Net transfer between EAGF and EAFRD || 351 900 000 ||   ||   ||   || 351 900 000 ||   
 Margin ||   ||   ||   ||   ||   ||   
 3. || Security and citizenship || 2 171 998 732 || 1 677 039 976 ||   ||   || 2 171 998 732 || 1 677 039 976 
 Ceiling || 2 179 000 000 ||   ||   ||   || 2 179 000 000 ||   
 Margin || 7 001 268 ||   ||   ||   || 7 001 268 ||   
 4. || Global Europe || 8 325 000 000 || 6 842 004 256 ||   ||   || 8 325 000 000 || 6 842 004 256 
 Ceiling || 8 335 000 000 ||   ||   ||   || 8 335 000 000 ||   
 Margin || 10 000 000 ||   ||   ||   || 10 000 000 ||   
 5. || Administration || 8 404 610 581 || 8 405 483 381 ||   ||   || 8 404 610 581 || 8 405 483 381 
 Ceiling || 8 721 000 000 ||   ||   ||   || 8 721 000 000 ||   
 Margin || 316 389 419 ||   ||   ||   || 316 389 419 ||   
 Of which: Administrative expenditure of the institutions || 6 797 485 938 || 6 798 358 738 ||   ||   || 6 797 485 938 || 6 798 358 738 
 Sub-ceiling || 7 056 000 000 ||   ||   ||   || 7 056 000 000 ||   
 Margin || 258 514 062 ||   ||   ||   || 258 514 062 ||   
 6. || Compensations || 28 600 000 || 28 600 000 ||   ||   || 28 600 000 || 28 600 000 
 Ceiling || 29 000 000 ||   ||   ||   || 29 000 000 ||   
 Margin || 400 000 ||   ||   ||   || 400 000 ||   
 Total || 142 107 479 376 || 139 886 394 140 ||   ||   || 142 107 479 376 || 139 886 394 140 
 Ceiling || 142 540 000 000 || 135 866 000 000 ||   ||   || 142 540 000 000 || 135 866 000 000 
 Flexibility Instrument || 89 330 000 ||   ||   ||   || 89 330 000 ||   
 Contingency Margin ||   || 4 026 700 000 ||   ||   ||   || 4 026 700 000 
 Margin || 521 850 624 || 6 305 860 ||   ||   || 521 850 624 || 6 305 860 
   || Special Instruments || 503 179 528 || 403 149 428 || 79 726 440 || 79 726 440 || 582 905 968 || 482 875 868 
 Grand Total || 142 610 658 904 || 140 289 543 568 || 79 726 440 || 79 726 440 || 142 690 385 344 || 140 369 270 008 
[1]               OJ L 298, 26.10.2012, p. 1.
[2]               OJ L 347, 20.12.2013, p. 884.
[3]               OJ L 51, 20.2.2014, p. 1.
[4]               OJ L 204, 11.07.2014, p.1.
[5]               COM(2014) 234, 15.4.2014.
[6]               COM(2014)
329, 28.5.2014.
[7]               COM(2014)
461, 09.07.2014.
[8]               COM(2014)
641, 16.10.2014.
[9]               COM(2014) 564, 08.09.2014.
[10]             COM (2014) 649, 17.10.2014
[11]             OJ L 311, 14.11.2002, p.3.
[12]             OJ L 189, 27.06.2014, p.143.
[13]             OJ
L 288, 6.11.2007, p.27.