How to amend the annual EU budget in light of the current refugee crisis

Waar komen al die EU-potjes plotseling vandaan, als er een crisis uitbreekt? Hoai-Thu Nguyen, onderzoeker bij de Universiteit van Maastricht, legt het precies uit. De hoofdlijnen: budgetbufferzones, ingebouwde flexibiliteit en door te knippen in niet-noodgevoelige potjes.

In September 2015, already for the second time this year, after a first mobilization of more resources in June 2015,[1] the European Commission announced additional financial assistance of €801.3 million from the 2015 EU budget to tackle the current refugee crisis in the European Union (EU).[2]

Margins and flexibility

There are several ways to raise additional funding within the annual budget of the EU. Each annual budget of the EU is adopted within the Multiannual Financial Framework (MFF). The MFF sets out so-called ceilings, i.e. the maximum amount that the EU may spend in a certain political area (“heading”). In the current MFF 2014-2020 there are six different headings.[3]  Each year the European Parliament and the Council, acting as budgetary authority, adopt the budget for the following year upon the proposal of the Commission in accordance with article 314 TFEU and in compliance with the MFF. Here, a differentiation is made between commitment appropriations and payment appropriations. Commitment appropriations are the amounts committed to a certain heading for the financial year but not yet paid, whereas payment appropriations are the amounts that must actually be paid during that year.[4] 

Usually a margin is left between the two types of appropriations to leave some room of maneuvre in cases of unforeseen expenses. Moreover, the MFF regulation also provides for a number of flexibility instruments to enable the EU to react to emergencies such as the current crisis, most notably the Emergency Aid Reserve (art. 9 Reg. 1311/2013), the European Union Solidarity Fund (art. 10 Reg. 1311/2013), the Flexibility Instrument (art. 11 Reg. 1311/2013) and the European Globalization Adjustment Fund (art. 12 Reg. 1311/2013).[5] Under article 41 of Regulation 966/2012[6] the Commission may propose draft amending budgets (DAB) to the annual budget.

On September 30th 2015, the Commission announced its DAB n° 7/2015,[7] under which it intends to mobilize the first  €401.3 million out of the designated €801.3 million. The DAB proposes that out of these €401.3 million, €100 million in commitments is to be used for emergency assistance under the Asylum, Migration and Integration Fund (AMIF) and the Internal Security Fund (ISF); €1.3 million for the creation of 120 new posts in FRONTEX, EUROPOL and EASO; and €300 million for the European Neighbourhood Instrument (ENI) to assist third countries hosting refugees from Syria through the EU Regional Trust Fund in response to the Syrian crisis (Madad Fund). 

Various instruments

It proposes to achieve this sum through a combination of different instruments, namely the redeployment of appropriations within the 2015 budget, the use of margins and the mobilization of the Flexibility Instrument. Thus, the DAB foresees €70.6 million to be reallocated from other areas where it is not needed, in particular €33.7 million from the European Union Solidarity Fund, to which recourse is normally taken in the case of major disasters; €24.8 million in total from the European Agricultural Fund for Rural Development (EAFRD) and European Agricultural Guarantee Fund (EAGF) (€7.4 million), the European Maritime and Fisheries Fund (EMFF) (€2.01 million) and the Sustainable Fisheries Partnership Agreements (€15.43 million); and another €12 million from the Food and Feed Safety, Animal Health and Welfare, and Plant Health programs. For the remaining €330.7 million the Commission proposes the use of the margins under the headings 3 and 4 (€23.1 and €300 million respectively) as well as the mobilization of the Flexibility Instrument under heading 3, amounting to another €66.1 million.[8] The Flexibility Instrument is intended to “allow the financing, for a given financial year, of clearly identified expenditure which could not be financed within the limits of the ceilings available for one or more other headings”, with an annual maximum of €471 million.[9] 

In sum, the overall commitment of the 2015 budget would rise from ca. €161.9 billion to ca. €162.3 billion,[10] which is still beneath the overall ceiling of €162.96 billion set for 2015 by the MFF 2014-2015, following the technical adjustments.[11]

Redirection

The other €400 million announced by the Commission is not included in the DAB but instead will be “redirected from the already agreed 2015 budget for external action”,[12] including the Emergency Aid Reserve, the purpose of which is to first and foremost provide aid to humanitarian operations in non-EU countries. Here, €200 million will reinforce the humanitarian aid for refugees by assisting organizations such as the UNCHR or the World Food Programme, while the other €200 million will be used for the Trust Fund in response to the Syrian crisis (together with the €300 million of the DAB, the fund will be increased by €500 million).[13]

The DAB was approved by the Council on 8th October 2015 and is now pending the approval of the European Parliament.

 

[1] European Commission, Draft Amending Budget N° 5 to the General Budget 2015, COM (2015) 241 final.

[2] European Commission, Managing the Refugee Crisis: Budgetary measures under the European Agenda on Migration, Press release of 30.09.2015, available under: http://europa.eu/rapid/press-release_IP-15-5729_en.htm (last retrieved on 12 October 2015).

[3] See for the Multiannual Financial Framework 2014-2020: Council Regulation (EU, EURATOM) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020, OJ L 347/884.

[4] Article 10 of Regulation (EU, EURATOM) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, EURATOM) No 1605/2002, OJ L 298/1.

[5] For other instruments see: Regulation 1311/2013, supra note 3.

[6] Regulation 966/2012, supra note 4.

[7] European Commission, Draft Amending Budget N° 7 to the General Budget 2015, COM (2015) 485 final.

[8] The margin under heading 4 is used here to cover the remaining commitment appropriations all other instruments have been exhausted.

[9] Article 11 of Regulation 1311/2013, supra supra note 3.

[10] DAB n° 7/2015, supra note 7, p. 11.

[11] European Commission website on the Multiannual Financial Framework 2014-2020, available at: http://ec.europa.eu/budget/mff/index_en.cfm (last retrieved on 12 October 2015).

[12] European Commission, Questions and Answers: additional funding to address the refugee crisis, Fact sheet of 30.09.2015, available at: http://europa.eu/rapid/press-release_MEMO-15-5730_en.htm (last retrieved on 12 October 2015).

[13] Ibid.