Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mobilisation of the Contingency Margin in 2017
Date: 2016-10-17
Institutions: Directorate-General for Budget, European Commission
Subjects: EU expenditure, EU financial instrument, EU migration policy, aid to refugees, budgetary procedure, commitment of expenditure, financial management, general budget (EU)

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   EUROPEAN COMMISSION  Brussels, 17.10.2016  COM(2016) 678 final   Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mobilisation of the Contingency Margin in 2017  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

The Council Regulation (EU, EURATOM) No 1311/2013 of 2 December 2013 laying down 
the multiannual financial framework for the years 2014-20201 (‘MFF Regulation’) allows for 
the mobilisation of the Contingency Margin of up to 0,03 % of Gross National Income for the 
EU-28  to  react  to  unforeseen  circumstances  as  a  last  resort  instrument.  In  the  technical 
adjustment  of  the  MFF  for  20172,  based  on  Article  6  of  the  MFF  Regulation,  the  absolute 
amount of the Contingency Margin for the year 2017 is set at EUR 4 496,8 million. 

In  accordance  with  Article  13  of  the  MFF  Regulation,  and  after  having  examined  all 
possibilities  for  financing  additional  and  unforeseen  commitment  needs,  the  Commission 
proposes to mobilise the Contingency Margin for 2017 for an amount of EUR 2 150,6 million 
so  as  to  complement  the  commitment  appropriations  related  to  expenditure  in  headings 
3 Security and Citizenship and 4 Global Europe in the general budget of the European Union 
for  the  financial  year  2017,  over  and  above  the  commitment  ceilings  of,  respectively, 
EUR 2 578 million and EUR 9 432 million in current prices. 

In accordance with point 14 of the Interinstitutional Agreement of 2 December 2013 between 
the  European  Parliament,  the  Council  and  the  Commission  on  budgetary  discipline,  on 
cooperation in budgetary matters and on sound financial management3, the Commission has 
carried out an analysis of the possibility to reallocate significant amounts within the existing 
budget. In accordance with Article 13(3) of the MFF Regulation, the Commission proposes to 
offset the reinforcement of the expenditure ceiling of headings 3 and 4 as follows:  

 

 

 

2017:  EUR 850 million  against 
the 
expenditure  ceiling  of  heading  2 Sustainable Growth: Natural Resources  and 
in  heading 
EUR 514,4 million  against 
5 Administration. 

the  unallocated  margin  available  under 

the  unallocated  margin  available 

2018:  EUR 570 million  against  the  unallocated  margin  available  in  heading 
5 Administration. 

2019:  EUR 216,2 million  against  the  unallocated  margin  available  in  heading 
5 Administration. 

This  proposal  includes  an  amount  of  EUR 1 164,4 million  for  which  the  Commission  had 
already  made  a  proposal  to  mobilise  the  Contingency  Margin  for  heading  3  which 
accompanied  the  initial  draft  budget  20174,  and  which  is  now  repealed  and  replaced  by  the 
present proposal. 

This proposal has been preceded by a Commission proposal to mobilise in full the amount of 
the Flexibility Instrument5 available for 2017 (EUR 530 million), also for heading 3. 

OJ L347, 20.12.2013, p.884. 

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2  COM(2016) 311, 30.6.2016. 
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OJ C 373, 20.12.2013, p. 1. 
COM(2016) 314, 30.6.2016. 
COM(2016) 313, 30.6.2016. 

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2. 

JUSTIFICATION OF THE MOBILISATION 

2.1. 

INTRODUCTION  

2.1.1  Heading 3 Security and Citizenship 

The internal dimension of the migration, refugee and security crisis is financed from heading 
3  through  the  Asylum,  Migration  and  Integration  Fund  (AMIF),  the  Internal  Security  Fund 
(ISF) as well as through specialised agencies such as Frontex, EASO, eu-Lisa and Europol. A 
new instrument providing emergency support within the Union was adopted by the Council in 
2016,  which  will  continue  to  offer  in  2017  emergency  support  of  a  humanitarian  nature  in 
response to the current influx of refugees and migrants into the Union.  

The expenditure ceiling of heading 3 in 2017 stands at EUR 2 578 million in current prices. 
The  commitment  appropriations  authorised    for  heading  3  in  the  2016  budget  are 
EUR 4 052 million,  which  required  the  mobilisation  of  all  the  availability  of  the  Flexibility 
Instrument  at  a  level  of  EUR 1 506 million  over  and  above  the  ceiling  of  heading  3,  in 
accordance with Article 11(2) of the MFF Regulation. 

The Commission proposes the full mobilisation of the EUR 530 million annual ceiling for the 
Flexibility Instrument available in 2017 to increase spending above the expenditure ceiling of 
heading 3. 

However, the budgetary needs for managing the impact of the migration, refugee and security 
crisis  are  at  least  as  high  in  2017  as  in  2016.  As  a  policy  response,  the  Commission  has 
proposed a wide range of structural actions in relation with security and the management of 
external borders, the reform of the Common European Asylum System, integration and return.  

Spending  related  to  migration,  refugees  and  security  under  heading  3  represents  more  than 
70 %  of  total  expenditure  under  the  ceiling.  The  Commission  has  carefully  examined  all 
possibilities  for  redeployment  and  proposes  to  reduce  the  level  of  appropriations  (in 
comparison  with  the  financial  programming)  for  Food  and  Feed  and  the  Civil  Protection 
Mechanism. Nonetheless, the room for manoeuvre is limited by the small size of programmes 
and  new  requirements,  such  as  the  new  emergency  measures  in  plant  health  foreseen  in  the 
Food  and  Feed  Regulation  for  2017.  For  this  reason  it  is  only  possible  to  cover  a  small 
percentage  of  the  additional  needs  related  to  migration  and  refugees  by  a  redeployment  of 
appropriations within heading 3. 

As a consequence the only possible recourse to meet the budgetary needs is the mobilisation 
of the Contingency Margin. Availability of margins in other headings allows its mobilisation 
to be completely offset in 2017.  

The corresponding payment appropriations will be accommodated within the 2017 ceiling for 
payments; there is therefore no need to mobilise the Contingency Margin in payments. 

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2.1.2  Heading 4 Global Europe 

On  7  June  2016  the  Commission  presented  a  communication  on  establishing  a  new 
Partnership  Framework  with  third  countries  under  the  European  Agenda  on  Migration6, 
which builds on the Valletta Action Plan7 and the results of high-level dialogues on migration 
and compacts8 with a number of priority partners, which will require additional funding. The 
short-term objective of these compacts, which are tailor-made to each beneficiary country, is 
to offer better perspectives to refugees and candidates for migration in order for them to stay 
close to home and avoid taking dangerous journeys. This is especially urgent considering the 
significant number of migrants who have lost their lives trying to reach the coast of Europe 
from North-Africa.  

To reach this target in a timeframe compatible with the need to take action rapidly, especially 
with  the  priority  partners,  the  Commission  proposes  to  reinforce  the  Development 
Cooperation  Instrument  (DCI)  and  the  European  Neighbourhood  Instrument  (ENI)  by 
EUR 750 million  in  commitments.  More  specifically,  the  goal  is  to  support  mediterranean 
countries such as Lebanon, Jordan, Tunisia and Libya through the European Neighbourhood 
Instrument (ENI) but also to adress the root causes of migration by helping countries in Sub-
Saharan Africa and Asia, through the use of the Development Cooperation Instrument (DCI). 

In order to address the root causes of migration, the Commission also launched the European 
Fund for Sustainable Development (EFSD) based on the establishment of an EFSD Guarantee 
and  an  EFSD  Guarantee  Fund.  The  Commission  proposes  to  endow  the  EFSD  Guarantee 
Fund with EUR 750 million over the period 2017–2020, of which EUR 400 million from the 
European Development Fund (EDF) over the four years, EUR 100 million from the ENI over 
2017–2020  (of  which  EUR 25 million  in  2017),  and  EUR 250 million  of  commitment  (and 
payment) appropriations in 2017. 

The  transfer  of  EUR 13,8 million  expenditure  for  the  three  'double-hatted'  European  Union 
Special  Representatives  from  heading  4  to  the  budget  of  the  European  External  Action 
Service (heading 5) creates a corresponding margin under the expenditure ceiling of heading 
4.  Such  a  margin  can  be  used  first  to  cover  part  the  EUR 1 billion  of  additional  and 
unforeseen  needs  under  this  heading  as  outlined  in  the  amending  letter  No 1  to  the  draft 
budget  20179,  before  having  recourse  to  the  contingency  margin  to  cover  the  oustanding 
amount (EUR 986,2 million). The Commission proposes to offset part (EUR 200 million) of 
such  outstanding  amount  against  the  margin  available  in  heading  2  Sustainable  Growth  - 
Natural  Resources  in  2017,  leaving  a  residual  margin  of  EUR 439,3 million;  the  remaining 
part  (EUR 786,2 million)  is  to  be  offset  against  the  margins  of  heading  5  Administration  in 
2018 (EUR 570 million) and  2019 (EUR 216,2 million).  In this way the offsetting  preserves 
as much as possible some room of manoevure to address future unforeseen events.  

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COM(2016) 385, 7.6.2016. 
http://www.consilium.europa.eu/en/meetings/international-summit/2015/11/11-12 
Tailor-made country packages to implement the new partnership framework. The short-term objective is 
to save refugees to stay close to home and avoid taking dangerous journeys. 
COM(2016) 679 final, 17.10.2016. 

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2.2. 

THE CONTINGENCY MARGIN AS THE LAST RESORT INSTRUMENT 

Article  13(1)  of  the  MFF  Regulation  defines  the  Contingency  Margin  as  a  last  resort 
instrument  to  react  to  unforeseen  circumstances.  In  the  2017  Draft  Budget  (DB),  the 
Commission proposes to use in full the unallocated margin under the commitment ceiling of 
headings  3  and  4  after  having  examined  all  possibilities  for  redeployment  within  these 
headings.  

Given  the  full  mobilisation  of  the  flexibility  instrument  in  the  DB  2017  (EUR 530 million), 
the  mobilisation  of  the  Contingency  Margin  for  2017  at  a  level  of  EUR 2 150,6 million  is 
therefore the only available instrument to address the gap between the level of the expenditure 
ceiling of headings 3 and 4 in 2017 and the additional unforeseen needs estimated for 2017.  

2.3. 

BUDGETARY IMPACT OF UNFORESEEN CIRCUMSTANCES IN 2017 

Although  the  migration,  refugee  and  security  crisis  began  in  2015,  its  impact  and 
consequences  are  still  evolving  on  a  day-to-day  basis.  Political  decisions  in  third  countries 
about  the  acceptance  of  refugees  on  their  territory  and  the  opening  and  closure  of  borders 
make it very hard to foresee the long-term evolution in this field. The changing character and 
unpredictability of the crisis justifies the use of the Contingency Margin as the last resort tool 
for  addressing  the  unforeseen  consequences  of  the  migration,  refugee  and  security  crisis  on 
the expenditure needs in headings 3 and 4. 

3. 

OFFSETTING  THE  CONTINGENCY  MARGIN  AGAINST  THE  MFF 
CEILINGS  

Article  13(3)  of  the  MFF  Regulation  requires  that  amounts  made  available  through  the 
mobilisation  of  the  Contingency  Margin  shall  be  fully  offset  against  the  margins  for  the 
current or future financial years. 

According  to  Article  13(4)  of  the  MFF  Regulation,  the  amounts  offset  shall  not  be  further 
mobilised  in  the  context  of  the  MFF  so  that  the  total  ceilings  of  commitment  and  payment 
appropriations  laid  down  in  the  MFF  for  the  current  and  future  financial  years  shall  not  be 
exceeded.  Consequently,  the  mobilisation  of  the  Contingency  Margin  for  commitment 
appropriations in 2017 under headings 3 and 4 and the related offsetting have to respect the 
total commitment ceiling for the years 2017 to 2020.  

The Commission proposes to offset the reinforcement of the expenditure ceilings of headings 
3 and 4 in four instalments spread as follows between 2017 and 2019:  

 

2017:  

 

 

EUR 850 million  against 
expenditure ceiling of heading 2, and  

the  unallocated  margin  available  under 

EUR 514,4 million  against 
expenditure ceiling of heading 5. 

the  unallocated  margin  available  under 

the 

the 

 

 

2018:  EUR 570 million  against 
expenditure ceiling of heading 5. 

the  unallocated  margin  available  under 

the 

2019:  EUR 216,2 million  against  the  unallocated  margin  available  under  the 
expenditure ceiling of heading 5. 

After the offsetting a margin of EUR 439,3 million would still remain under the expenditure 
ceiling of heading 2, and no margin under the expenditure ceiling of heading 5 in 2017. For 

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2018 and 2019, the offsetting proposed will leave a margin at least of EUR 100 million under 
heading 5 following the estimates of the indicative financial programming. 

The overall commitment ceiling for the whole MFF will remain unchanged. 

4. 

ADDITIONAL ELEMENTS  

The European Parliament and the Council are reminded that the publication of this Decision 
in the Official Journal of the European Union shall not intervene later than the publication of 
the budget 2017 of the European Union, in accordance with the last sentence of article 13(1) 
of the MFF Regulation. 

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Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the mobilisation of the Contingency Margin in 2017 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, 

Having regard to the Interinstitutional Agreement of 2 December 2013 between the European 
Parliament,  the  Council  and  the  Commission  on  budgetary  discipline,  on  cooperation  in 
budgetary  matters  and  on  sound  financial  management1,  and  in  particular  the  second 
paragraph of point 14 thereof, 

Having regard to the proposal from the European Commission, 

Whereas,  
(1) Article 13 of Council Regulation No 1311/20132 has established a Contingency Margin of 
up to 0,03 % of the Gross National Income of the Union.  

(2) In accordance with Article 6 of Regulation (EU, Euratom) No 1311/2013, the Commission 
has calculated the absolute amount of this Contingency Margin for 20173. 

the  2017  expenditure  ceilings 

(3) After having examined all other financial possibilities to react to unforeseen circumstances 
within 
for  headings  3 Security and Citizenship  and 
4 Global Europe laid down in the multiannual financial framework (MFF), and after having 
proposed to mobilise the Flexibility Instrument for heading 3 of MFF for the full amount of 
EUR 530 000 000 available in 2017, the mobilisation of the Contingency Margin is necessary 
to address the needs stemming from the migration, refugee and security crisis by increasing 
the  commitment  appropriations  of  headings  3  and  4  of  MFF  in  the  general  budget  of  the 
European Union for the financial year 2017, over and above the ceilings of those headings. 

(4) Having regard to this very particular situation, the last-resort condition in Article 13(1) of 
Regulation (EU, Euratom) No 1311/2013 is fullfilled. 

(5)  In  order  to  minimise  the  time  taken  to  mobilise  the  Contingency  margin,  this  Decision 
should apply from the beginning of the 2017 financial year, 

HAVE ADOPTED THIS DECISION: 

For the general budget of the Union for the financial year 2017, the Contingency Margin shall 
be  mobilised  to  provide  EUR 1 164 380 960  in  commitment  appropriations  over  and  above 
the  commitment  ceiling  of  heading  3 Security and Citizenship  and  EUR 986 230 000  in 

Article 1 

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OJ C 373, 20.12.2013, p. 1. 
Council  Regulation  (EU,  Euratom)  No  1311/2013  of  2  December  2013  laying  down  the  multiannual 
financial framework for the years 2014-2020 (OJ L 347, 20.12.2013, p. 884). 
Communication from the Commission to the Council and the European Parliament of 30 June 2016 on 
the  technical  adjustment  of  the  financial  framework  for  2017  in  line  with  movements  in  GNI 
(COM(2016) 311 of 30 June 2016). 

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commitment  appropriations  over  and  above 
4 Global Europe of the multiannual financial framework. 

the  commitment  ceiling  of  heading 

Article 2 

The  EUR 2 150 610 960  in  commitment  appropriations  mobilised  through  the  Contingency 
Margin  for  the  financial  year  2017  shall  be  offset  against  the  margins  of  the  years  2017  to 
2019 of the following headings: 

(a) 

2017: 

(i) heading 2 Sustainable Growth - Natural Resources : EUR 850 000 000; 
(ii) heading 5 Administration : EUR 514 380 960; 

(b) 

(c) 

2018: heading 5 Administration : EUR 570 000 000 million; 

2019: heading 5 Administration : EUR 216 230 000 million. 

This decision shall enter into force on the day of its publication in the Official Journal of the 
European Union. 

Article 3 

It shall apply from 1 January 2017. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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