WORKING DOCUMENT. EN United in diversity EN on Council's position on DB Committee on Budgets. Rapporteur: Anne E.

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1 EUROPEAN PARLIAMT Committee on Budgets WORKING DOCUMT on Council's position on Committee on Budgets Rapporteur: Anne E. Jensen DT\ doc PE v01-00 United in diversity

2 The purpose of this working document is to present from a factual point of view the Council's position on the Commission Draft Budget 2014 with the view to facilitate the establishment of the Parliament's position in October and to prepare the discussions in the framework of the upcoming negotiations with the Council. General assessment On 2 September, the General Affairs Council is expected to adopt its position on the Draft Budget 2014 by written procedure, confirming the vote expressed by COREPER on 17 July. An overview by Heading is presented in Annex I. Due to the late presentation of the Draft Budget this year the traditional July trilogue has been postponed to 3 September, where the two arms of the budgetary authority will have the opportunity to present and defend their positions on the 2014 budget. As a reminder, the recommendation for mandate of the EP delegation for the trilogue was given by BUDG Coordinators on 11 July and comprised the following political priorities 1 : - a sufficient and realistic level of commitment and payment appropriations to allow the programmes to kick-off with sufficient means in the new MFF; - to put economic and sustainable growth, competitiveness, the creation of employment, the fight against youth unemployment in the centre of budget 2014 priorities; - to ensure that the outstanding payment claims for 2013 are covered in full and that the 2014 budget would provide sufficient payment appropriations to avoid the problems encountered in 2012 and 2013; - to resolve the pertinent problem of the unprecedentedly high level of RALs, which is endangering the EU's ability to meet its legal obligations; - the importance of organising an interinstitutional meeting on payments, which was initially scheduled for the first semester of 2013 but was shifted to the autumn of Council's position on the Draft Budget, on the other side, was based on the following arguments 2 : - the need of a balance between budgetary discipline and sound financial management, taking into account the constraints of the national economies, while ensuring the fully-fledged start of the new programmes in the first year of the Multiannual Financial Framework (MFF); - the need to keep payments under control and adjust them on the basis of past and 1 Recommendation for mandate for trilogue on the 2014 draft budget 2 Based on Council position on the Draft Budget Ref. n.12222/13 PE v /27 DT\ doc

3 current budget implementation and realistic absorption capacities; - the aim to keep under control the volume of administrative expenditure of the institutions in line with the approach adopted by national public services, while ensuring proper functioning of the institutions; - the need to leave adequate margins within all headings (except Heading 1b) to deal with unforeseen events. The overall cuts brought by the Council to the DB amount to EUR 240 million (-0.2) in commitment appropriations (CA) and EUR billion (-0.8) in payment appropriations (PA). Compared to the adopted budget for 2013 (including amending budgets from 1 to 5), this represents a decrease of EUR 9 billion (-6) in CA and of EUR 9.5 billion (- 6.6) in PA. The figures presented by the Council in its reading as regards payments show instead an increase of 1.3 as compared to This presentation is however misleading and resulting from the fact that only DAB 1 is included into the adopted 2013 budget (as the only one on which the adoption procedure is closed). However, it cannot be ignored that both the Council and the Parliament expressed before summer, in the framework of the final deal on the MFF , their political agreement on the adoption of the payments required in DAB 2 up to an amount of 7.3 billion EUR to reinforce several budget lines running out of appropriations for Moreover, in its resolution of 3 July the Parliament made clear that "the consent vote on the MFF Regulation cannot be granted unless there is an absolute guarantee that the outstanding payment claims for 2013 will be covered in full"(...) and made Parliament's consent to the MFF Regulation or its adoption of the Budget 2014 conditional to the full approval by the Council of the remaining tranche of DAB 2 needed to cover any shortfall in payments for Both the reached political agreement on the first tranche of DAB 2, to be ratified through a legal vote in autumn, as well as the political condition on the second tranche set by the Parliament need to be considered and DAB 2 is thus to be fully included in the calculation for a more realistic comparison, which shows in fact a dramatic decrease vis à vis the appropriations actually available in the 2013 budget. The cuts in payment appropriations compared to the DB presented by the Commission concern all headings, but the ones most affected are Heading 1a - Competitiveness for growth and jobs (-3.6 as compared to DB or - EUR mln), Heading 4 - EU as global player (-2.5 as compared to DB or - EUR mln) and 3 Paragraph 4 of the EP resolution of 3 July 2013 DT\ doc 3/27 PE v01-00

4 Heading 5 - Administration (-1.8 as compared to DB or - EUR mln). The least affected headings are Headings 1b and 2 (-0.4 and -0.2 compared to DB respectively). It is evident that the strategy followed in this reading has been to spare the cohesion policy from the heaviest cuts, which are instead concentrated on Heading 1a (cuts are more than double as compared to Heading 1b). Moreover the overall approach of the Council demonstrates that they are following blindly the strategy of the past years to cut horizontally without taking into consideration neither the real needs in terms of payments (by definition higher at the end of the programming period) nor the already low levels of the ceilings agreed for the new MFF. As regards commitments, Council further reduces the level proposed in the Draft budget (-0.2), which was already by 6 lower than budget The detail in percentage per heading is presented in the table below. EUR mln Heading 1a Heading 1b Heading Heading Heading Heading TOTAL Together with its reading the Council also adopted a declaration on payments, where it asks the Commission to submit as early as possible the amending letter for agriculture and a draft amending budget if the payment levels in the DB prove insufficient for Headings 1a, 1b, 2 or 4. Such declarations have become a standard practice for Council in the past years, however, they have not proved to be useful in resolving the problem of unsettled payment claims as shown in the last two budgetary procedures and the MFF negotiations. As already mentioned, the Parliament has underlined in the latest MFF resolution its determination to honour all legal obligations and outstanding payment claims for 2013 before it gives its consent to the MFF. The same message was also included in the recommendation for mandate for the trilogue on Draft Budget 2014: PE v /27 DT\ doc

5 9. Reiterates its position, as set out in its aforementioned resolution on the MFF of 13 March 2013, that the consent vote on the MFF Regulation cannot be granted unless there is an absolute guarantee that the outstanding payment claims for 2013 will be covered in full; expects the Council, therefore, to take a formal decision on Draft Amending Budget 2/2013 for an amount of EUR 7.3 billion, no later than the Ecofin Council to be held on 9 July 2013; insists that the Council stick to its political commitment to adopt without delay a further amending budget to avoid any shortfall in payment appropriations that could lead to a structural deficit in the EU budget at the end of 2013; states that Parliament will not give its consent to the MFF Regulation or will not adopt the Budget 2014 until this new amending budget, covering the remaining deficit as identified by the Commission, has been adopted by the Council; Recalls that the outstanding payments carried over from 2013 will have to be deducted from - and consequently reduce - the level of payment appropriations available for 2014; is concerned that only 8 of the 2014 payments will be devoted to payments deriving from new commitments, whereas 52 will be needed to pay the outstanding commitments from previous years (RALs); Additionally Croatia put forward a unilateral statement annexed to the Council's position, where it insists on the importance of full recruitment on all posts related to its accession, without prejudice to the reduction applied by the EU institutions of 5 in the staff level over the period Belgium also made a unilateral statement during COREPER meeting of 17 July but it was not included in the official Council position and was kept as part of the minutes only. In the declaration Belgium expresses dissatisfaction with the misbalance between payment and commitment appropriations in EU's budget and fears that this trend might lead to hampering EU's structural policies and the Union's ability to meet its obligations. Regarding the high level of RALs accumulated in the last years of the and carried forward to the next one, the Parliament called once again in its mandate for trilogue for finding a sustainable solution to this problem in the spirit of good interinstitutional cooperation. As a reminder, the RAL can be expected to reach EUR 235 billion at the end of 2013, since there was a difference of approximately 18 billion between CA and PA in 2013 adopted budget. Considering the first tranche of DAB 2 is adopted (EUR 7.3 bln), this amount would be reduced to 228 billion, under the assumption that no or little decommitment takes place. If the full DAB 2 gets adopted (EUR 11.2 bln), then the RALs will drop to 224 billion. Originally the Commission expected only EUR 180 bln of RALs in the end of Furthermore, in the text of the new IIA, the three institutions agreed to monitor closely the problem of shifting high level of RALs from one year to another and to avoid the situation of lack of payments in the last years of the MFF. In its draft budget the Commission devoted 52 of the payment appropriations to settle the outstanding commitments, thus leaving only 8 of the payments to cover DT\ doc 5/27 PE v01-00

6 new programmes. Nevertheless, this approach would still leave EUR 6 bln of RALs remaining. As the Council further cuts payment appropriations by 0.8 in comparison to DB, the gap between payments and commitments grows further to 7.2 bln EUR and thus the problem of the high level of RALs would most likely remain valid for the 2014 budget as well. In connection to the problem with RALs and unsettled payment claims, the Parliament has been insisting on holding an interinstitutional meeting on payments in the spring of 2013 but it did not receive the support of the Council and was postponed to the autumn. Such meetings could be of added value for discussing and finding a common understanding on these issues. Assessment by heading Heading 1a When analysing the reading of the Council on Heading 1a the discrepancy with the conclusions of the February European Council in support of growth, competitiveness and employment becomes dramatically evident. It is worth reminding that the prudent position adopted by the Commission in its DB 2014 as regards this heading, with a more than 1.2 billion EUR cut in payments as compared to the 2013 Budget 4, already put at risk the proper implementation of the concerned programmes. On the other hand the DB foresees a limited increase in commitments (+3.3 i.e million EUR). However, such increase is mainly due to the inclusion of the large scale infrastructure projects (ITER, Galileo and Copernicus) within the ceilings. If excluding these amounts, the heading decreases by more than 1.1 billion EUR (- 7.75) as compared to last year. Actually some of the most strategic programmes were already reduced in the DB both in commitment and in payment appropriations as compared to 2013 (a partial correction was possible, though, by the frontloading achieved by the Parliament in the MFF negotiations): Programme CA CA after frontloading PA Horizon COSME Erasmus for all Thus, the Commission's proposal was already inconsistent with the engagement taken at the most recent European Councils for a compact for Growth and Jobs as well as of a "real growth" for Horizon and Erasmus as compared to the 2013 level. 4 DABs 1 to 5 are considered as adopted and included into the calculations for the analysis. It is worth reminding that in case DAB 2 was not included, the reduction in payments in the as compared to 2013 would amount to 8.4 billion EUR. PE v /27 DT\ doc

7 Even after the compensation obtained by the possible frontloading in 2014 (and 2015), Horizon and COSME would continue decreasing as compared to 2013, which risks to have serious repercussions on the performance of these programmes already in the first year of the new MFF. Biggest cuts for Heading 1a Against this background and regardless all the recent political engagements and public statements in favour of the objectives of this heading undertaken by the heads of State and governments, in its reading of 17 July the Council decided to cut further both commitments and payments as compared to DB, as follows: EUR million Council position Difference Difference 2-1 Heading 1a Margin As regards payments this is the biggest cut performed across all headings, both in relative and absolute terms, coming on top of the biggest cut proposed by the Commission as compared with the 2013 budget. This seems to have been done completely neglecting the real needs of running programmes, with the majority of payment appropriations needed next year to cover the programmes bills and with the level of RAL constantly increasing under this heading 5. Significant cuts in priority areas Significant cuts touched as well those programmes that the European Council considered strategic for the next programming period and which have proven highly performing so far according to the implementation rates, namely Horizon 2020 ( million EUR) and COSME (-5.7 million EUR). This choice is in open contradiction with the explanation given by the Council that cuts are performed "on the basis of past and current budget implementation and realistic absorption capacities" 6. 5 At the end of 2012 the RAL under Heading 1a reached the amount of ca. EUR 26,6 billion (+ 2,8 billion EUR compared to end 2011), which represents 12.2 of the overall level of RALs at the end of 2012 (217 billion EUR). As in 2011, outstanding commitments under this heading derived mostly from the FP7 programme (16.4 billion EUR). It is also to be mentioned that the new Financial Regulation sets stricter rules for payments following grant agreements, which diminish further the margin of manoeuvre on the payment needs for the new Horizon 2020 programme. 6 Based on Council position on the Draft Budget Ref. n.12222/13 DT\ doc 7/27 PE v01-00

8 What is particularly serious is that some of the lines identified for the cuts correspond to the closure of the programmes (FP7 and CIP), which on the contrary are those which will be subject to the highest effort in terms of bills to be paid in In the absence of a fully adopted DAB 2 (11.2 billion EUR) by the end of 2013 these cuts would worsen the dramatic shortage of liquidity the Commission is facing to pay for advances, interim and final payments to running projects under these programmes during next year. Other major cuts in payments affected - the large scale infrastructure projects (-154 million EUR in total, with the highest share, million EUR, borne by Galileo and 34 million borne by ITER), - the Connecting Europe Facility (-87 million EUR, of which 81.5 concentrated on the transport strand), - the PSCI and "Customs, Fiscalis and Anti-Fraud" programmes also suffer from significant cuts in relative terms with respectively million EUR (-9.26) and million EUR (-8.77), Surprisingly enough, several cuts concerned lines for which reinforcements have been requested (and politically agreed by the budgetary authority up to the amount of 7.3 billion EUR so far) in DAB 2. This idiosyncratic attitude of the Council is evidently not a serious way of handling the EU budget and its actual needs in terms of payments. It is worth reminding that the exercise, repeated in the last budgetary procedures, of keeping the level of payments artificially low is partly at the origin of the current severe shortage in payments and obliged the Commission to present a request of additional appropriations through DAB 2 at an unprecedented level earlier this year. As regards commitments, although in global terms the reduction may seem limited (- 60 million EUR), it is worth noting that: 1) One of the strongest defensive points put forward by the European Council when presenting the February agreement on the MFF was the priority given to the strategic objectives of growth and employment, pursued through the programmes under Heading 1a. By cutting these same programmes now, even by short, the Council clearly acts in contradiction with itself and the previous commitments undertaken by the Member States. 2) The major cut is again borne by Horizon 2020 (-43.7 million EUR), i.e. one of the two programmes (together with Erasmus for all) identified by the European Council as strategic for the future period and thus needing reinforcement and a "real growth" as compared to PE v /27 DT\ doc

9 When looking at the figures, even after the partial compensation due to the frontloading in 2014 and 2015, it becomes evident that this growth not only does not concern the year 2014 (-1.4 billion EUR vs. 2013) but that it will not occur until These cuts contradict therefore the spirit and the letter of the recent political agreement on the next MFF as regards the setting up of the specific flexibility instrument for youth unemployment and research: as mentioned above, the new mechanism allows for a frontloading for Horizon, COSME (and Erasmus) in 2014 and 2015, by respectively 200 and 50 million EUR. The cuts decided by the Council on Horizon 2020 and COSME go in plain opposition with such a decision. Last but not least, the Council justifies its proposed cuts on Horizon by claiming that they are concentrated on the administrative support lines of this programme, thus not affecting its operational expenditure. This is a very simplistic vision of the world, given that the two types of expenditure are evidently interlinked and it is quite naive to sustain that a cut in the administration will have no effect at all on the implementation and good performance of the actions of the programme. Furthermore the start-up of a programme at the beginning of a programming period requires administrative rather than operational expenditure. Cutting on the administration therefore risks to jeopardize the efficient starting of these programmes. 3) The argument of the Council that these cuts are intended to leave sufficient margins available for unforeseen circumstances and for the flexibility instruments cannot be supported, considering that - a sufficient margin given the circumstances (higher than for the adopted budget 2013 in any case) has been already left available in the DB and that - the flexibility instruments are by definition to be mobilised over and above the ceilings, and therefore the level of the margins play no role at all in their use. Heading 1b This heading has been almost spared from cuts in commitments (-3,3 million EUR), whereas it underwent a decreased in payments (-202,2 million EUR, -0,4 as compared to DB). The proposed cuts would increase the margin from EUR 22,420 million (DB) to EUR 25,720 million, which is however extremely tight. The cuts by EUR 3,3 million in commitments concern the "support expenditure and non-operational technical assistance" for ESF (- 1,8 million EUR) and ERDF (- 1,5 million EUR) - non differentiated appropriation (NDA). These items cover the expenditure related to the representation expenses, training, meetings, missions, translations and expenditure on external staff at headquarters. As regard the payments, the main cuts relate to (by objective): Investing for growth and jobs objective: - 114,151 million EUR (corresponding to a decrease by -0,23 compared to the figures) DT\ doc 9/27 PE v01-00

10 European Territorial cooperation (ETC): - 84,805 million EUR (or - 6,19 compared to the ). Cuts by Fund (for payments): ESF: - 32,788 million EUR (of which - 12,7 million EUR for the Investing in growth and jobs goal in more developed regions and - 6,3 million EUR in the transition regions, - 11,9 million EUR for the completion of ESF for period); ERDF: - 125,155 million EUR (of which - 12,1 million EUR for investment in growth and jobs goal for more developed regions and - 9,7 million EUR for transition regions, - 3,1 million EUR for ETC. The major part of this amount (98,7 million EUR) has decreased the appropriations for the completion of programmes for the previous period). Cohesion Fund: - 44,312 million EUR (of which -29,6 million EUR for the Completion of Cohesion Fund projects prior to 2007 and -14,7 million EUR from the Investment for growth and jobs goal for 2014). It should be noted that 69,33 of global cuts in payments concern the appropriations for completion of programmes from previous periods (i.e million EUR out of - 202,256 million EUR for the heading 1b), while, depending on the leftovers from period, both in terms of overall RALs and unpaid claims, some extra payments might still need to be made available to clear pre 2014 commitments. As a reminder, heading 1b is responsible for the biggest part of the current outstanding commitments (around EUR 20 bln payment claims are to be rolled over to 2014); therefore cutting the level of payments for 2014 would also lead to a strong increase in the level of RAL by the end of next year. Heading 2 Heading 2 is the heading least cut by the Council - only mln EUR in CA (0.00) and mln in PA (-0.2). Payment appropriations were mostly reduced for Fisheries (-6.14 or -47 mln EUR) and the LIFE + programme ( or mln EUR), which runs contrary to the priorities of the Parliament set out in the Recommendations for mandate, among which are the climate action and environmental objectives promoted by the LIFE+ programme. The rural development fund suffered only minor reduction of or mln EUR. It is important to note that 2014 is a transition year for Heading 2, since the new programmes will be entering into force only as of Furthermore, an amending letter with updated estimates on market related expenditure and direct payments is expected by the Commission in the autumn, which might necessitate a revision of the amount of financial discipline required in Heading 2. PE v /27 DT\ doc

11 Heading 3 Despite the cuts to this heading already proposed by the Commission in the DB, Council cuts further down its appropriations both in commitments by 5.2 million EUR (-0,24 compared with DB) and in payments by 10 million EUR (-0,60 compared with DB). This leads to a slight increase in the margin under this heading to 44.8 million EUR (compared to 39.5 million EUR in the DB). As regards commitment appropriations the proposed cuts mainly concern administrative support expenditures within different programmes and actions. Regarding payment appropriations the proposed cuts mainly concern administrative support expenditures within different programmes and actions. However, Council also suggests decreasing further the payment appropriations for the Creative Europe Programme with 1.47 million EUR (-0,79) and IT systems (SIS II and VIS) with 1.6 million EUR (-14,45) compared to DB. Finally it is worth noting that the tight margin of 44.8 million leaves little room for manoeuvre in order to be able to cope with unforeseen situations under heading 3. Heading 4 Heading 4 was one of the headings most cut in the DB as compared to 2013 budget: 12.5 in CA and in PA. This however did not prevent the Council to further cut commitments by 0.21 (EUR mln) and payments by 2.5 (EUR mln) compared to DB, thus increasing the margin from EUR to EUR mln. Particularly worrying are the cuts to Humanitarian Aid ( in CA and in PA) and the European Voluntary Humanitarian Aid Corps ( in PA), especially since Humanitarian aid has had 100 implementation rate in the past and is experiencing a severe shortage of payments in 2013 (85 of the payments have been used up in the first half of 2013). The Council did not spare the Development Cooperation Instrument from its cuts (-1.85 in PA), thus abandoning the attainment of the MDGs and the 0.7 target of GNI by The Instrument for Pre-Accession Assistance and the European Neighbourhood Instrument saw a decrease of (-0.21 in CA and in CA respectively, in PA and in PA respectively). The external instrument with the highest decrease in payments is the Partnership Instrument (-33.34), even though it merges 2 instruments existing in the current MFF (ICI and ICI+) and serves to promote the competitiveness of European companies in the industrialised countries. DT\ doc 11/27 PE v01-00

12 Other major cuts compared to DB: Instrument for Stability: in CA and in PA Instrument for Nuclear Safety Cooperation: in PA (was already cut by 25.9 in PA in DB) Macrofinacnial Assistance Civil Protection Mechanism and European Emergency Response Center: in PA As usual CFSP was left untouched by the Council. The payments for UNRWA were reduced by EUR 2 mln, even though the Parliament considers this programme traditionally underfinanced. Heading 5 It should be borne in mind that in its DB Commission: has contained all its non-salary related expenditure (-1,7 excluding Croatia accession), took into account the new staff regulation, included the 2011 and 2012 salary adjustments currently challenged before the Court. In this heading, the highest cuts are on Pensions and European schools (- 52 Mio EUR, -3,2 ) and on Expenditure related to officials and temporary staff in policy areas (-69,7 Mio EUR, -3,5). The latter cut represents approximately the amount of the 2012 salary adjustment impact on 2014 that would be due in case of a positive ruling in 2014 of the Court next year (NB: it is considered that the salary adjustment 2011 would have been settled by the end of 2013); this amount is not taking into account the backlog or late interest. The Council does not seem to have modified the Commission standard abatement rate this year. In the past, it had systematically increased all such rates in institutions, but being now the second year that establishments plans are decreased by 1, occupancy rates are automatically improved. Other cuts affect the OLAF (-1,32 Mio EUR), the Publications Office (1,89 Mio EUR), the PMO (-0,58 Mio) and the OILs (Brussels -1,265Mio, Luxembourg -0,58 Mio EUR). It is worrying that administrative budget is cut significantly especially in the beginning of the life-cycle of the multiannual programmes where they have not yet PE v /27 DT\ doc

13 reached cruising speed and they need additional administrative support. Decentralised agencies Council yet again managed to further cut appropriations for decentralised agencies even though the Commission's Draft Budget had already foreseen serious belttightening for most of them. It is reminded that even though the overall increase proposed by the Commission was 3,8, a very unequal distribution between agencies saw real term reductions for 9 agencies and 22 agencies altogether saw either reductions, freezing or increases below inflation rate. Council cut further: Agencies from Heading 1A on average by 1,4, agencies from Heading 2 on average by 1,2, agencies from Heading 3 by on average 0,9 and the one agency within Heading 4 by 1,2. Within headings these cuts were also not applied equally: In Heading 1A the European Banking Authority's appropriations were cut by Council by 2,3, the European Insurance and Occupational Pensions Authority by 2,8 and the European Securities and Markets Authority by even 3,7, just to name the three agencies which had been a strong priority of the European Parliament in previous years. Annexes Annex I - Council's position by heading of the financial framework Annex II - Council's statement on payment appropriations and unilateral declarations by Member States Annex III - EP mandate for trilogue against Council's position Annex IV - Draft calendar for 2014 budgetary procedure DT\ doc 13/27 PE v01-00

14 Annex I Council's position by heading of the financial framework EUR million PE v /27 DT\ doc

15 DT\ doc 15/27 PE v01-00

16 PE v /27 DT\ doc

17 DT\ doc 17/27 PE v01-00

18 PE v /27 DT\ doc

19 Annex II Council's statement on payment appropriations and unilateral declarations by Member States 1) Council's Statement on payment appropriations "The Council asks the Commission to submit as early as possible the letter of amendment for agriculture (including information about the possible carry-over of assigned revenue) in order to appropriately calibrate the level of resources in heading 2 (Sustainable growth: natural resources) in the 2014 budget. Furthermore, the Council asks the Commission to submit a draft amending budget if the payment appropriations entered in the 2014 budget are insufficient to cover expenditure under sub-heading 1a (Competitiveness for growth and jobs), sub-heading 1b (Economic, social and territorial cohesion), heading 2 and heading 4 (Global Europe) of the multiannual financial framework. It urges the Commission to present as early as possible updated figures concerning the state of affairs and estimates regarding payment appropriations under sub-heading 1b and, if necessary, to present a draft amending budget for this sole purpose. The Council will take position on the draft amending budget as quickly as possible in order to avoid any shortfall in payment appropriations." 2) Unilateral statement by Croatia "Croatia stresses the importance of a full recruitment on all posts related to its accession, especially for middle and high management level, and underlines that all efforts should be made by the institutions and specifically by EPSO to ensure that the necessary action is taken to timely implement the process of filling up the posts granted by the budgetary authority with officials, without prejudice to a reduction applied to all EU institutions, bodies, agencies and their administrations of 5 in the staff over the period The criteria should be as stipulated in the relevant article of the Staff Regulations to arrive at the broadest possible geographical proportional basis as soon as possible." 3) Unilateral statement by Belgium (as part of the minutes of COREPER's meeting of 17 July) "Lors du vote au Conseil sur le budget 2014 de l'union européenne, la Belgique s'est abstenue. Ce faisant, la Belgique a voulu exprimer ses craintes à l'égard de l'évolution des crédits d'engagements et de paiements au fil des ans. Premier budget du Cadre financier pluriannuel, force est de constater que le budget 2014, fortement sous contraintes, n'est pas de nature à corriger cette tendance. L'inadéquation entre le niveau des crédits de paiements et des DT\ doc 19/27 PE v01-00

20 crédits d'engagements ne manquera pas, sur le long terme, d'handicaper les politiques structurelles de l'union ou de limiter ses moyens de faire face à ses obligations. La Belgique le regrette et souhaite à l'avenir un budget plus adéquat et mieux équilibré." PE v /27 DT\ doc

21 Annex III EP mandate for trilogue against Council's position EP mandate for the trilogue on the 2014 Budget is analysed below by Heading against the main cuts adopted by Council. Heading 1a 16. Is particularly worried by the strong reduction in the overall level of payments (-9.3 i.e billion EUR) as compared to 2013; reminds that such a decrease can be hardly justified by the argument of the slow start of the programmes under this sub-heading in the beginning of the MFF considering their nature and rules, their successful implementation rate so far as well as the gap in payments carried over from the past years which needs to be covered in 2014; mln EUR Heading 1a Reaffirms its support in favour of the EU programmes in the field of research, competiveness, entrepreneurship and innovation, which are at the heart of the Europe 2020 strategy; notes the drastic decrease in commitments and payments for Horizon 2020 (-13.6 in CA and in PA) and COSME (-20.6 in CA and -2.5 in PA) and expects the Commission to present an Amending Letter as soon as possible to reflect the frontloading for these programmes in 2014 and 2015 achieved by the Parliament in the framework of the MFF agreement; notes that this will imply for COSME an increase of 7.8 as compared to 2013; mln EUR Horizon COSME Reminds the importance attached to programmes for youth, education and training; underlines the positive image that these programmes carry among citizens and the proven added value that quality education and vocational training bring for future growth and employment; considers that the reduced level of commitments and payments for Erasmus DT\ doc 21/27 PE v01-00

22 for all (-0.8 in CA and in PA) as compared to 2013 contradicts the European Council engagement of 8 February for a "real growth" of this programme as compared to 2013 level; mln EUR Erasmus for all Stresses the European added value of the programmes building infrastructures in the field of transport, energy and telecommunications; notes that the appropriations for the Connecting Europe Facility have been increased both in commitments and in payments as compared to 2013 but denounces that such increase is not sufficient to compensate the huge cuts brought to this programme by the European Council's agreement of 8 February as compared to the Commission proposal over the whole period, which will seriously hinder its performance and efficacy in particular in the areas of energy and digital networks; reminds of the importance of providing a realistic level of appropriations for this new policy, reflecting the specific needs for efficient implementation at each cycle of the programme; calls on the Commission to provide information about the possibility to backload CEF in order to free up financing for the YEI frontloading; mln EUR CEF Heading 1b 22. Deplores the overall decrease of payment appropriations to EUR ,7 million (- 9,3 compared to 2013 budget); stresses that 92,6 of this appropriation shall cover the payment claims for the previous programming periods, respectively 91,4 for and 1,2 for , and that only 7 of overall payments relate to the startup of the new programmes; mln EUR Heading 1b PE v /27 DT\ doc

23 23. Welcomes the targeting of appropriations under the ESF and cohesion policy for the Youth Employment Initiative (YEI); expects the Commission to facilitate its quick implementation and the Member States to swiftly put the youth guarantee schemes into operation in order to ensure that young unemployed are offered the possibility of further education and training; welcome the proposal to frontload appropriations in the first years of the MFF, which is in line with the EP request; calls for ensuring that funds for this initiative are additionally made available for the final years of the MFF in case the youth unemployment problem is still persisting; notes that the Commission has proposed a significantly lower level of payments than for commitments (450 million in comparison to 1,8 bln); asks the Commission to closely monitor the implementation of YEI and in case of need for additional payments to proceed swiftly to transfers or to propose and amending budget; calls on the Commission to provide detailed information for its choice of programmes to be back loaded to ensure funds for the YEI initial frontloading; mln EUR YEI Notes the fact that provision has been made for an additional increase of up to EUR 1 billion for the food distribution scheme for those Member States wishing to use this increase to assist the most deprived persons in the Union; expects the Council and Parliament to agree as soon as possible on the concrete modalities for the implementation of this commitment in the context of the current negotiations on the legal basis for the scheme in question (from MFF resolution); calls on the Commission and the Member States to make every effort to ensure its smooth and rapid implementation; mln EUR European Aid to the Most Deprived Heading Considers that climate action and environmental objectives are of a cross-cutting nature and reminds of the importance of the LIFE+ programme in this respect; believes that this must be translated into concrete measures to be implemented under the various EU programmes and policies, in order to make a substantial contribution to sustainable DT\ doc 23/27 PE v01-00

24 growth and effectively address major challenges such as resource scarcity, preservation of the biodiversity and the fight against climate change; welcomes the increase in CA of 10.3 (404.6 mln) for LIFE+ and regrets the decreased PA by 1.1 (263 mln); mln EUR LIFE Heading While acknowledging the new challenges facing the European Union in the field of security, migration and integration, recalls also the strong support consistently given by the European Parliament to adequate funding for both citizens, culture and media programmes which enjoy high implementation rate and produce noticeable leverage and spill-over effects and generate clear and proven European added value by encouraging trans borders cooperation and active citizenship; is therefore particularly concerned about the proposed cuts in CA in the programmes 'Rights and Citizenship' by 26,5, 'Europe for Citizens' by 21,9 and 'Creative Europe' by 5,8 compared to the 2013 budget; mln EUR Rights and Citizenship Europe for Citizens Creative Europe Heading Underlines that, while representing only 5.7 of the EU budget, the funding of EU external relations policies has a real and concrete impact on the ground; therefore calls for careful consideration of the needs of candidate and potential candidate countries beneficiaries of IPA, a programme that saw a drop of in CA compared to its 2013 level and -5.7 in PA, a balance between Southern and Eastern Neighbourhood countries in accordance with the developments in these regions, whereas the I is decreased by in CA and -3.4 in PA, as well as for sufficient appropriations for EU's commitment of reaching the MDGs and in particular the 0,7 target of GNI by 2015 for Development cooperation, while its major source of financing the DCI PE v /27 DT\ doc

25 underwent a reduction of in CA and in PA; mln EUR IPA I DCI Reiterates its strong support to Humanitarian aid; is therefore deeply concerned about decreasing the amount of PA by -4.4 for 2014, despite its 100 implementation in the past years and the severe shortage of payments experienced in 2013, where nearly 85 of the payments for 2013 were already depleted in the first half of the year; welcomes the increase of +4.6 in CA compared to 2013 and the overall increase of the available envelope for the next MFF; Reiterates its strong support to civil protection and to the European Voluntary Humanitarian Aid Corps; mln EUR HUMA EVACH Notes with concern that the commitment appropriations for the Emergency Aid Reserve amount to EUR 297 million, while payment appropriations amount only to EUR 150 million; questions whether this level of payments will be sufficient to ensure EU's capacity to respond rapidly to any urgent crisis; mln EUR Emergency Aid Reserve Deplores the Commission's approach to budgeting lower level of appropriations for the UNWRA in its draft budget and relying that the budgetary authority would then increase its financing in the course of the budgetary procedure; Regrets that this year this practice DT\ doc 25/27 PE v01-00

26 remains valid even though the Commission proposed CA by 50 mln higher than it did in 2013, the appropriations are still by EUR 50 mln lower than the final amount agreed by the Budgetary authority in 2013; mln EUR UNRWA Heading Notes that total administrative expenditure for all institutions is estimated at EUR million, i.e. an increase of 1,5 as compared to 2013 excluding the expenditure related to the accession of Croatia, leaving a margin of EUR million; mln EUR Heading Questions the further cut of -5,6 applied to European schools and notes the increase of 7,2 for Pensions, belonging to section III but common to all institutions; European Schools PE v /27 DT\ doc

27 Annex IV - Draft calendar for 2014 budgetary procedure 23 January (BUDG) - Presentation of a draft report on EP guidelines for the preparation of 2014 Budget January - Meeting with national Parliaments 20 February (BUDG) March - April - Commissioner Lewandowski on payment leftovers Vote on the guidelines (deadline for AM: 30 January) (Plenary adoption: March) - Visits to specialised committees 19 March - pm - Spring budgetary Trilogue 20 March - Presentation of a WD on PP-PAs 16 and 30 May (BUDG) - Presentation and exchange of views on a draft report on DB / mandate May (tbc) 5 June - Inter-institutional meeting on payments and RAL 26 June - Commission adopts DB - Finalisation of a preliminary list of PP-PAs, to be sent to the Commission 9 July - 1st meeting with specialised Budget Rapporteurs 11 July (BUDG) - Adoption of a draft recommendation on DB / mandate - Meeting agencies - Exchange of views on PP-PAs 17 July - Adoption of Council's position on DB by COREPER 2 September - Adoption of Council's position Week 35 - WD on Council's position on DB 3 September - am - Budgetary Trilogue 5 September - Deadline (noon) to table amendments to BUDG by Committees and MEPs (40 signatures) 12 September - Deadline (noon) for tabling amendments to Plenary by Political Groups mid-september (tbc) end of September (tbc) 2-3 October (BUDG) - Vote on figures - 2nd meeting with specialised Budget Rapporteurs - 2nd inter-institutional meeting on payments 9 October (BUDG - STR) - Vote on resolution (deadline for AM: 7 October) 16 October - Deadline for re-tabling amendments not adopted by BUDG to Plenary 16 October - pm - Budgetary Trilogue 23 October (Plenary) - Adoption of EP position 24 October - 13 November November 7 November Conciliation period: - Opening conciliation meeting - Budgetary Trilogue 11 November - Closing conciliation meeting DT\ doc November - Plenary 27/27 adoption of the Joint text PE v01-00