How is the Initial Budget Modified Throughout the Year? Examples for the Years 2007-2009

31-08-2010

This note aims at providing some information on the changes brought to the annual Budget as voted by the Parliament at the end of each year. It provides figures on the budgetary modifications, which mainly include amending budgets and transfers. It also focuses on the year-end amending budget reducing the level of payments appropriations to align the budget to the estimates of needs, which reduces Member States contributions to the EU budget. The note concludes that such an amending budget does not seem well in line with art. 37 of the Financial Regulation which states that: 'If there are unavoidable, exceptional or unforeseen circumstances, the Commission may present (preliminary) draft amending budgets'. Its direct effect is to reduce the level of the year's surplus, what gives an erroneous picture of budgetary implementation, compared to the initial budget voted by the budgetary authority. Besides, should no agreement be found between the two arms of the budgetary authority, such amending budget, while reducing the authorised budget for the year, would also reduce the level of the provisional twelfths for the upcoming year. Finally, it seems that MS treasuries do not benefit from such an amending budget as one would have expected since, in the Commission's cash management system, unused funds usually remain on Commission's accounts in national Treasuries or Central Banks.

This note aims at providing some information on the changes brought to the annual Budget as voted by the Parliament at the end of each year. It provides figures on the budgetary modifications, which mainly include amending budgets and transfers. It also focuses on the year-end amending budget reducing the level of payments appropriations to align the budget to the estimates of needs, which reduces Member States contributions to the EU budget. The note concludes that such an amending budget does not seem well in line with art. 37 of the Financial Regulation which states that: 'If there are unavoidable, exceptional or unforeseen circumstances, the Commission may present (preliminary) draft amending budgets'. Its direct effect is to reduce the level of the year's surplus, what gives an erroneous picture of budgetary implementation, compared to the initial budget voted by the budgetary authority. Besides, should no agreement be found between the two arms of the budgetary authority, such amending budget, while reducing the authorised budget for the year, would also reduce the level of the provisional twelfths for the upcoming year. Finally, it seems that MS treasuries do not benefit from such an amending budget as one would have expected since, in the Commission's cash management system, unused funds usually remain on Commission's accounts in national Treasuries or Central Banks.