Documents considered by the Committee on 25 January 2017 Contents

10EU General Budget for 2017

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny

Document details

(a) Proposed Decision on the mobilisation of the European Union Solidarity Fund; (b) Proposed Decision on the mobilisation of the Flexibility Instrument in relation to the on-going migration, refugee and security crisis; (c) Proposed Decision on the mobilisation of the Contingency Margin in 2017; (d) Draft Budget for 2017; (e) Amendment Letter No. 1 to the 2017 Draft Budget; (f) Proposed Decision on the mobilisation of the Contingency Margin in 2017

Legal base

Articles 314 TFEU and 106a, EURATOM Treaty; special legislative procedure; QMV


HM Treasury

Document Numbers

(a) (37905), 10763/16, COM(16) 312; (b) (37906), 10764/16, COM(16) 313; (c) (37907), 10765/16, COM(16) 314; (d) (37911), —, SEC(16) 280; (e) (38157), 13147/16, COM(16) 679; (f) (38173), 13377/16, COM(16) 678

Summary and Committee’s conclusions

10.1In December 2016 the Council and the European Parliament formally adopted the EU General Budget for 2017, on which we have scrutinised six preparatory documents. The Government has now informed us about the final outcome of discussion of the budget proposals, making particular reference to expenditure on the EU’s global navigation satellite system, Galileo.

10.2We are grateful to the Government for the information it gives us about the conclusion of the budgetary negotiations and now clear the documents from scrutiny. However, we note the Government’s comment that the outcome for 2017 is 6% lower than that for 2016. But we are doubtful about the Government’s implied claim that it has, with likeminded Member States, secured significant budgetary restraint. This is because it appears that the commitment appropriations in the adopted budget are a little higher than the Commission originally proposed and that the adopted payment appropriations are only a little lower than the Commission’s original proposal.

Full details of the documents

(a) Proposed Decision on the mobilisation of the European Union Solidarity Fund to provide for the payment of advances in the general budget of the Union for 2017: (37905), 10763/16, COM(16) 312; (b) Proposed Decision on the mobilisation of the Flexibility Instrument to finance immediate budgetary measures to address the on-going migration, refugee and security crisis: (37906), 10764/16, COM(16) 313; (c) Proposed Decision on the mobilisation of the Contingency Margin in 2017: (37907), 10765/16, COM(16) 314; (d) Statement of estimates of the European Commission for the financial year 2017: (37911), —, SEC(16) 280; (e) Letter of amendment No 1 to the draft general budget for 2017: Updating the estimated needs for agricultural expenditure and fisheries—Enhancing successful programmes and instruments for sustainable growth—Migration agenda, external investment plan and security—Technical adjustments relating to agencies and administrative expenditure—Increase of revenue linked to fines: (38157), 13147/16, COM(16) 679; (f) Proposed Decision on the mobilisation of the Contingency Margin in 2017: (38173), 13377/16, COM(16) 678.


10.3The Draft Budget and three related proposed Decisions, documents (a)-(d), set out, in June 2016, the Commission’s proposals for EU expenditure in 2017. This was the first stage in the annual process of establishing the EU’s General Budget for the following year and provided the basis for negotiations between the two arms of the Budgetary Authority (the Council and the European Parliament). The context for the Draft Budget was determined by the Multiannual Financial Framework for the period 2014–20, which sets out annual ceilings for budget expenditure.

10.4In the Draft Budget for 2017, document (d), the Commission proposed commitment appropriations70 of €157.7 billion (£135 billion), which represented 1.05% of EU Gross National Income (GNI). For payment appropriations71 the Commission proposed €134.9 billion (£115.5 billion), or 0.9% of EU GNI. The margin72 under the Multiannual Financial Framework ceiling was €0.82 billion (£0.7 billion) in commitments and €8 billion (£6.9 billion) for payments.

10.5The 2013 Interinstitutional Agreement on budgetary matters provides the possibility of finance for (“mobilisation of”) the EU Solidarity Fund, which releases emergency financial aid following a major disaster in a Member State or candidate country. The Multiannual Financial Framework allows mobilisation of the Flexibility Instrument, which provides funding in a given financial year for clearly identified expenses which could not be covered by one or more budget headings without exceeding their expenditure ceilings, and the Contingency Margin, which is a mechanism to react to unforeseen circumstances as a last resort instrument. The three proposed Decisions, documents (a)-(c), were to mobilise the EU Solidarity Fund, the Flexibility Instrument and the Contingency Margin for sums included in the Draft Budget.

10.6In October 2016 the Commission presented a Letter of Amendment, document (e), to update its Draft Budget for 2017, which was being negotiated between the Council and the European Parliament. This was to take into account both technical adjustments on expenditure that had occurred within the course of the year, and proposals accompanying the Commission’s mid-term review of the Multiannual Financial Framework for the period 2014–20. The amending letter increased the Draft Budget’s commitment appropriations to €159 billion (£136.1 billion) and payment appropriations to €135.4 billion (£115.9 billion). The changes fell into four areas: agriculture and fisheries; technical adjustments; growth and jobs; and migration and security. The first two are annual features of amending letters, the second two were particular to the budget proposals for 2017.

10.7Also in October 2016 the Commission withdrew its original proposal for mobilisation of the Contingency Margin, document (c). Instead it proposed a larger mobilisation of the Contingency Margin, document (f), in support of the migration and security section of the amending letter.

10.8The EU has a two-phase policy for developing a global navigation satellite system (GNSS). The first phase, GNSS 1, is the European Geostationary Navigation Overlay System (EGNOS) programme. The second phase, GNSS 2, is the programme, named Galileo, to establish a new satellite navigation constellation with appropriate ground infrastructure. It is based on the presumption that the EU ought not to rely indefinitely on GPS (the US Global Positioning System) and GLONASS (the Russian Global Navigation Satellite System) systems, augmented by EGNOS. Galileo is being carried out in conjunction with the European Space Agency. Since 1999 various stages and aspects of the GNSS programmes have been scrutinised by our predecessors and us.

The Minister’s letter of 11 January 2017

10.9The Chief Secretary to the Treasury (Mr David Gauke) tells us now about the final outcome on the EU General Budget for 2017. He says that:

10.10The Minister then refers to a promise he made, in a European Committee B debate on 7 December 2016 about the mid-term review of the Multiannual Financial Framework, to provide information about spending on the EU’s GNSS programme, Galileo.74 He says that:

10.11The Minister says finally that:

Previous Committee Reports

Eighteenth Report HC 71-xvi (2016–17), chapter 2 (18 November 2016) and Eighth Report, HC 71-vi (2016–17), chapter 2 (13 July 2016).

Annex: EU General Budget as adopted for 2017

Appropriations by heading

billion €



1. Smart and inclusive growth:

a) Competitiveness for growth and jobs

b) Economic, social and territorial cohesion





2. Sustainable growth



3. Security and citizenship



4. Global Europe



5. Administrative expenditure (for all EU institutions)



Special instruments:



Total appropriations



70 Commitment appropriations set the limit of legal obligations that can be made in the budget year for activities that will lead to payments in the current and future budget years.

71 Payment appropriations are the amounts of funds available to be spent during the budget year, arising from commitments made in the current or previous years.

72 The ‘margin’ refers to the difference between total commitment appropriations/payment appropriations in the Draft Budget and total commitment appropriations/payment appropriations provided for in the Multiannual Financial Framework.

73 The EU General Budget for 2017 was formally adopted on 1 December 2016. See the annex to this chapter for a summary of the figures.

27 January 2017