REPORT on Draft amending budget No 9/2008 of the European Union for the financial year 2008

8.12.2008 - (16263/2008 – C6‑0462/2008 – 2008/2311(BUD))

Section III – Commission
Committee on Budgets
Rapporteur: Kyösti Virrankoski

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on Draft amending budget No 9/2008 of the European Union for the financial year 2008, Section III – Commission

(16263/2008 – C6‑0462/2008 – 2008/2311(BUD))

The European Parliament,

–   having regard to Article 272 of the EC Treaty and Article 177 of the Euratom Treaty,

–   having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities[1], and particularly Articles 37 and 38,

–   having regard to the general budget of the European Union for the financial year 2008, as finally adopted on 13 December 2007[2],

–   having regard to the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management[3],

–   having regard to Preliminary draft amending budget No 10/2008 of the European Union for the financial year 2008, which the Commission presented on 31 October 2008 (COM(2008)0693),

–   having regard to Draft amending budget No 9/2008, which the Council established on 27 November 2008 (16263/2008 – C6‑0462/2008),

–   having regard to Rule 69 of and Annex IV to its Rules of Procedure,

–   having regard to the report of the Committee on Budgets (A6‑0487/2008),

A. Whereas Draft amending budget (DAB) No 9 to the general budget 2008 covers the following items:

-    A net increase in the forecast of revenues (EUR 1 198,7 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, 3b and 4 (EUR 4 891,3 million), after taking into account the redeployments proposed in the global transfer;

-    Inclusion of the budgetary aspects related to the financing of the Facility for rapid response to soaring food prices in developing countries in 2008, as resulting from the joint declaration of the Parliament and of the Council of 21 November 2008 on the financing of the Food Facility,

B.  Whereas the purpose of DAB No 9/2008 is to formally enter this budgetary adjustment into the 2008 budget,

C. Whereas the Council has adopted Preliminary draft amending budget (PDAB) No 10/2008 as DAB 9/2008, following the cancellation of PDAB 8/2008,

1.  Takes note of Preliminary draft amending budget No 10/2008;

2.  Approves Draft amending budget No 9/2008 unamended;

3.  Instructs its President to forward this resolution to the Council and Commission.

• [1]  OJ L 248, 16.9.2002, p. 1.
• [2]  OJ L 71, 14.3.2008.
• [3]  OJ C 139, 14.6.2006, p. 1.

EXPLANATORY STATEMENT

According to article 37 par. 1 of the Financial regulation the European Commission may present Preliminary Draft Amending Budget if there are "unavoidable, exceptional or unforeseen circumstances". Following the budgetary conciliation of 21 November 2008, the Council has announced that it will not adopt Draft Amending Budget 8/2008. In consequence, PDAB 10/2008 became the DAB 9/2008.

Adopted by the Commission on 31st October 2008 this amending budget originally only seeked to decrease payment appropriations in budgets lines from Heading 1A, 1B, 2, 3B and 4, totalling an amount of EUR 4 891,3 million and to enter a net increase of revenues of EUR 1 200 mio into the buget. Also it serves for implementing the agreement found on the "food facility" during the 2009 budget procedure, as regards to 2008 (the food facility covers 2008, 2009 and 2010).

Concerning the different points of Draft Amending Budget No 9/2008, your rapporteur has the following comments:

I. Decrease of Payments

The lions share of the surplus concerns Heading 1B (EUR 4,5 billion). During the discussion in COBU concerns were expressed about the low implementation rate during discussions in COBU, whereas others insisted in that the rules should be obeyed. The decrease in PA concerns all Structural funds:

Budget Line	Fund	Change (EUR million)
04 02 17	ESF — Convergence	-649 702 522
04 02 19	ESF — Regional competitiveness and employment	-965 000 000
13 03 16	ERDF — Convergence	-1 127 000 000
13 03 18	ERDF — Regional competitiveness and employment	-200 000 000
13 03 19	ERDF — European territorial cooperation	-158 000 000
13 04 02	Cohesion Fund	-1 415 000 000
Total Heading 1b		-4 514 702 522

In its recent annual report (year 2007), the Court of Auditors states, as in previous years, that cohesion policies (42 billion) are the area most affected by errors. Following the Court's sample estimate at least 11 % of the value of reimbursed cost claims should not have been paid out.

The huge reduction by EUR 4,9 billion of unspent appropriations means that it will be returned to the Member States.

At the conciliation of 21 November, EP delegation expressed deepest concern as to the extremely low under implementation of EU policies mainly for cohesion but also for other EP's priorities. A Joint declaration was agreed and so was an unilateral declaration from EP (see annex)

II. Food Facility

European Parliament and Council, at the conciliation meeting of 21 November 2008, have agreed by way of a joint declaration to provide part of the financing for the "facility for rapid response to soaring prices in developing countries" (so-called "food facility").

Concerning Budget 2008, in conclusion, the appropriations will be made available from the Emergency Aid Reserve for a total of EUR 262 millions, of which 22 millions from the appropriations still available in the 2008 budget, and 240 million through a one-off increase in the amount of the Emergency Aid Reserve to be budgeted in 2008. The total amount of EUR 262 mio. is subject of transfer request DEC 45/2008 seeking to shift the appropriations from the EAR to the new Food Facility line. In this Draft Amending Budget a token entry (p.m.) will therefore be created -budget article 21 02 03 Rapid response to food price increases in developing countries.

III. Conclusion

Your rapporteur recommends to adopt the draft amending budget unamended.

ANNEX

3.      Implementation of the Cohesion policy

"Without prejudging the upcoming proposals from the Commission in the context of the economic downturn, the European Parliament, the Council and the Commission:

- Recognise that, in view of the challenges posed by the current economic downturn, the economy may benefit from accelerating the implementation of structural and cohesion funds within the ceilings of the agreed multiannual financial framework 2007-2013;

- Recognise that, under the established control framework, interim payments cannot take place until management and control systems in Member States have been judged to be compliant with the requirements and, as concerns major projects, until such projects have been adopted by the Commission;

- Encourage the Member states to submit the description of their management and control systems and the compliance assessments as soon as possible so as to allow the Commission to rapidly start their analysis.

Within this framework, the European Parliament and the Council:

- Invite the Commission to take the necessary measures, within the existing legal framework, to rapidly assess the most critical aspects of the management and control systems (MCS), enabling starting the interim payments;

- Invite the Commission to accelerate the examination of applications for major projects so as to facilitate their start and related interim payments;

- Invite the Commission to cooperate closely together with the Member States in order to have a rapid agreement of all aspects of compliance of the MCS;

- Welcome the Commission's regular information to the budgetary authority through updated summary tables on MCS and major projects;

- Invite the Commission to submit a monthly report to the budgetary authority on the approval of the MCS and the major projects as well as the level of execution of interim payments for each Member State;

- Invite the Commission to present a report on the implementation together with the PDB for the purpose of the budgetary and discharge procedures;

- Invite the Court of Auditors and the discharge authority to take this issue into account, as well as the multi-annual character of the Commission's control activity, when assessing the management of EU funds.

The European Parliament acknowledges that structural improvements and simplification measures are needed to avoid recurrent under-implementation and to ensure that payment appropriations develop in an orderly manner compared to commitment appropriations, as recalled by the Court of Auditors reports."

* * *

"2. Payments and implementation of the Cohesion policy

"The European Parliament expresses its deepest concern as to the extremely low level of payments, far below the MFF, which does not correspond to the real challenges of the European Union in a situation of economic crisis.

In particular, it expresses its deepest concern as to the unacceptable low level of implementation of the appropriations for the Cohesion policy, although this constitutes one of the fundamental policies of the European Union.

Calls on the Commission, and the Members States, responsible for the implementation of these appropriations, to adopt all measures possible to ensure its adequate implementation."

PROCEDURE

Title	Draft amending budget No 9/2008 of the European Union for the financial year 2008, Section III
References	COM(2008)0693 - 16263/2008 – C6-0462/2008 – 2008/2311(BUD)
Committee responsible   Date announced in plenary	BUDG 4.12.2008
Committee(s) asked for opinion(s)   Date announced in plenary
Rapporteur(s)   Date appointed	Kyösti Virrankoski 13.12.2006
Previous rapporteur(s)	James Elles
Date draft amending budget established by the Council	27.11.2008
Date draft amending budget forwarded by the Council	0.0.0000
Discussed in committee	2.12.2008
Date adopted	2.12.2008
Result of final vote	+: –: 0:	17 0 0
Members present for the final vote	Reimer Böge, Ville Itälä, Janusz Lewandowski, Margaritis Schinas, László Surján, Costas Botopoulos, Paulo Casaca, Brigitte Douay, Szabolcs Fazakas, Catherine Guy-Quint, Jutta Haug, Vladimír Maňka, Ralf Walter, Anne E. Jensen, Kyösti Virrankoski, Marusya Ivanova Lyubcheva, Gianluca Susta.
Substitute(s) present for the final vote
Substitute(s) under Rule 178(2) present for the final vote
Date tabled
Comments (available in one language only)