7 EU General Budget for 2013
| (a)
(35232)
12769/13
COM(13) 557
(b)
(35259)
12770/13
COM(13) 559
|
Draft Amending Budget No. 7 to the General Budget 2013: General statement of revenue: Statement of expenditure by section: Section III: Commission
Draft Decision on mobilisation of the Flexibility Instrument
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| Legal base | Article 314 TFEU and Article 106a EURATOM; co-decision; QMV
|
| Department | HM Treasury
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| Basis of consideration | Minister's letter of 3 October 2013
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| Previous Committee Report | HC 83-xiii (2013-14), chapter 20 (4 September 2013)
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| Discussion in Council | Not known
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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Background
7.1 During the course of a financial year the Commission presents
to the Council and European Parliament Draft Amending Budgets
(DABs) proposing increases or reductions for revenue and expenditure
in the current EU General Budget — there are about 10 DABs
each year.
7.2 The Interinstitutional Agreement of 17 May
2006 on EU budgetary and financial management allows mobilisation
of a Flexibility Instrument to allow the financing of clearly
identified expenditure which could not be financed within the
limits of the ceilings available for one or more Headings of the
Multiannual Financial Framework (MFF).
7.3 The European Social Fund (ESF), one of the
Structural Funds, is the EU instrument for supporting jobs, helping
people get better jobs and ensuring fairer job opportunities for
all EU citizens. The ESF finances programmes intended to improve
the job prospects of millions of Europeans, in particular those
who find it difficult to secure employment. Amongst the Conclusions
of the June European Council was that, in seeking to improve youth
employment, use should be made of the Structural Funds, with particular
focus on the ESF.[23]
7.4 DAB No. 7/2013, document (a), concerns an
increase of €150 million (£125 million) in commitment
appropriations in Heading 1b of the current MFF. The intention
is to increase the ESF in order to allow further commitment allocations
in 2013 for France, Italy and Spain "as a contribution to
the special effort needed to address the specific situations of
unemployment, in particular youth unemployment, and of poverty
and social exclusion in these Member States". The Commission
has proposed that the increase in commitment appropriations would
be covered by the margin under the ceiling of Heading 1b, that
is €16 million (£13 million), and by mobilisation of
the Flexibility Instrument for €134 million (£112 million),
as proposed with the draft Decision, document (b).
7.5 When we considered this matter, early last
month, we recognised the impetus the European Council intended
for tackling youth unemployment. But we asked the Government for
information on two points. First, what were the "certain
issues resulting from the final outcome of the negotiations of
the MFF for the years 2014-20, affecting France, Italy and Spain"
the Commission mentioned in support of its proposals? Secondly,
was there scope for transferring commitment appropriations from
elsewhere in the 2013 Budget, rather than having recourse to the
Flexibility Instrument? Meanwhile the documents remained under
scrutiny.[24]
The Minister's letter
7.6 In response to our first question the former
Financial Secretary to the Treasury (Greg Clark) says that:
- the June European Council discussed
and agreed on a number of elements and technical details of the
final MFF deal for 2014-20;
- there was a wide discussion of youth employment
and agreement that more needed to be done urgently to tackle this
issue;
- on that basis, the European Council took a decision
to resolve outstanding concerns held by France, Italy and Spain
through youth employment measures;
- this now takes the form of a one-off increase
in commitments under the ESF to tackle youth unemployment, poverty
and social exclusion in those Member States;
- the wider youth employment package also included
measures for all other Member States, namely increased flexibility
to use margins left available below the MFF ceilings for the years
2014-17 to create a 'global margin for commitments' to fund measures
to fight youth unemployment and agreement that the disbursement
of the €6 billion (£5 billion) allocated to the Youth
Employment Initiative should take place during the first two years
of the next MFF;
- other issues arising from the February European
Council agreement were also resolved at the June meeting, including
on the treatment of abatable rural development expenditure in
new Member States; and
- given the preservation of the rebate, in line
with the February European Council decision that the UK rebate
will remain unchanged, the Prime Minister could support this.
7.7 On mobilisation of the Flexibility Instrument,
the Minister says that:
"the Government will continue to press the Commission
to respect the FEC [February European Council] conclusions that
the Flexibility Instrument will only be 'mobilised in case of
need', with the objective being to 'finance a clearly identified
and unforeseen piece of expenditure'."
7.8 The Minister tells us that:
- the Presidency took DAB No.
7/2013, document (a), to Coreper on 25 September;
- the Government abstained on scrutiny grounds;
- Sweden and the Netherlands also abstained, while
all other Member States voted in favour; and
- as a result, there is a qualified majority in
favour and the matter is now going to the Council for formal approval.
Conclusion
7.9 We are grateful to the Minister for his
explanation as to the rationale for the DAB and its relationship
to the negotiation of the next MFF. However, we find his comments
in relation to the Flexibility Instrument and developments on
the proposals less clear. So we should like the new Minister to
answer the three following questions. We are told that DAB No.
7/2013 has been voted on ¯
what is the position in
relation to the draft Decision on the Flexibility Instrument?
Does the Government believe there is scope for transferring commitment
appropriations from elsewhere in the 2013 Budget, rather than
having recourse to the Flexibility Instrument?
We are told that the Government will continue to press the
Commission to respect the February European Council conclusions
on use of the Flexibility Instrument ¯
does this mean that that the Government has voted, or will be
voting, against the draft Decision?
7.10 Pending receipt of this further information
the documents again remain under scrutiny.
23 See http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/137634.pdf. Back
24
See headnote. Back
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